Business confidence, business savvy, organization, and accountability are four very important skills that are needed to achieve financial security.
Once those skills are learned, it is quite easy to create financial security for you and your family. It is important to note that financial mistakes can destroy all of your hard work very quickly. Nobody is perfect. I promise you that everyone makes mistakes. Some mistakes might be unavoidable, especially if you are in financial distress. However, the majority of mistakes that are made by business owners are avoidable, once they know what to look for.

When growing your business and your finances it is important that you work with your coach on two fronts: (1) How to improve business skills and (2) How to avoid or minimize mistakes. Please use the following list to determine if you are making mistakes; and if so, please make the necessary corrections as quickly as possible.

1. Not Updating Wills and Beneficiaries

According to Consumer Reports eighty-six percent of their readers hadn’t updated their wills or other estate-planning documents within the previous five years.

2. Not Telling Family about Financial Information 

In only 30 percent of households did both spouses know major details about the family finances. I recommend that you create a master sheet with all of your account information, passwords and websites and keep that list with your will. Make sure that you update the list at lease one time per year.

3. Not Maximizing Retirement Contributions

To achieve financial independence it is imperative that you contribute the maximum amount to your retirement funds. It is also imperative to know the expenses of the funds and to minimize your expenses where ever you can. For eg. mutual funds typically charge a much higher expense than Exchange traded funds (ETF’s).

4. Under-Insuring

The same Consumer Reports article sites that only 36 percent of homeowners had purchased full replacement cost on their homeowner’s policy. Only 20 percent had an umbrella policy. It is also important to make sure that you have under-insurance or uninsured motorist insurance if you are in a state that offers that coverage. Please check with your insurance agent to determine what is best for your individual situation.

5. Not Having an Emergency Fund

Emergencies can come at any time. To best protect yourself, you should have a minimum of one year’s personal and business expenses in an account. Think of the security that an extra $30,000 or greater would give you. Start slow, just put $20 per week away, it adds up over time. Of course, if you can afford more, then go ahead and put more away.

6. Mismanaging Debt 

Debt is the killer of dreams. Incurring credit card debt has been widespread in this economy. If you are in credit card debt, it is imperative to put your cards away and don’t charge anything else on them until the debt is erased. If you can’t afford something then do without it instead of charging it. Try and apply for a 0-balance transfer card and move your debt to that card. Doing this, will allow you to put every dollar repaid towards principal instead of interest.

7. Not Knowing How to Run an Effective, Profitable Business

If you are in business then it is important to know how to run and manage that business.

As discussed earlier, everyone makes mistakes. The important thing is not to beat yourself up if you have made mistakes, but rather learn from the mistake and correct it as soon as possible. You can learn to run an effective business and you can learn how to avoid or correct financial mistakes.

Your financial future is in your hands. The government will not be there to take care of you in retirement. If this article scares you, then I hope it scares you straight; straight into the land of knowledge. If you follow these tenets you will have a long profitable career; use debt wisely, live below your means, establish retirement accounts and fund them to the max, and obtain professional guidance.

Marketing is marketing is marketing correct? Wrong! Marketing should be based upon the economic cycle coupled with the maturity level of your business. This article will explain the differences and help you develop the skill-sets of how to market any business in any economy.

Most business experts would agree that there are 7 stages of the business lifecycle. All phases have their pitfalls and challenges. Marketing is different in each phase, so before you start your marketing campaigns you will need to take note of the phase of your practice and the economic cycle.

Seed Phase

Seed phase is where most new businesses reside. This is where your business is just an idea. Marketing during this phase should be aimed at gaining acceptance. A great way to do this is to create a niche for your business. In a poor economic climate, it will be much more difficult to get your name to stick because people will be holding onto their money and reluctant to spend on anything.

In a good economic climate, the opposite is true. People are willing to spend their money much more freely. During this phase, it is imperative that you have a good team of advisers. Hire a good CPA, attorney, business coach, and insurance agent. Your CPA will help you set up your books and advise on the most tax-efficient legal entity. Your Attorney will help you negotiate and review all legal documents. Your business coach will help you find the correct location, do a proper build out and help you to launch your business. Your insurance agent will help you get the insurance protection you will need.

Start-up Phase

Start-up is when your business is actually born. Will you be an LLC, Sole proprietor, Sub Chapter S Corp etc? These are all the legal entities that you need to discuss with your attorney and accountant. Once you choose the entity and are established, your business legally exists. Congratulations!

Marketing in this phase is about creating a customer/client base. It is vital that you start to create conservative strategic-based marketing campaigns so you don’t burn through your limited bankroll. Your advisers are very important during this phase. They will help you limit mistakes which can be quite costly.

Learn how to identify the true needs of your client/customer, and the needs that they would be willing to spend their money to fix. In a poor economy, you will need to increase your marketing budget. Since people are reluctant to spend money in poor economic times, you will need to increase your marketing budget because you will have to get your message out to about three times the number of people to make up for those that won’t spend their money. Your accountant will help you create budgets. Your business coach will help you organize your day-to-day tasks, as well as help you to establish the correct procedures that will carry you to the growth phase of business.

Growth Phase

Growth is where your volume and revenues are increasing rapidly along with multiple opportunities. During this phase competition also begins to surface. Management of your business should take priority over marketing during this phase. To keep the growth phase going, your systems will have to be able to support your volume. You will need to find, hire and train employees that will enable you to delegate tasks.

You should be getting plenty of internal referrals. Your marketing efforts in this phase can turn more inward. Customer appreciation events, in-house events, Social media, and the like are good marketing tools in this phase. External marketing can be an ongoing print, radio, or TV advertisement. The economic cycle will have little bearing on your efforts during this phase because your momentum should offset any negative economic ripples barring a full economic crisis.

An insurance agent should do a quarterly review to make sure that your insurance coverage limits are still adequate. Your accountant should be concentrating on establishing retirement plans and help you budget so you maximize your contributions. Your business coach should be helping you to organize your time, create procedures that will allow for continued growth, and help you with hiring staff. Your attorney should also be ready to help you review contracts for the many opportunities that will present themselves to you during this phase.

Established Phase

Established phase is where your business has matured and is thriving. You have developed a brand and customer loyalty. Your growth is predictable and manageable. Marketing in this phase should emphasize your established place in your community. Ideal marketing should become more passive which will allow you more free time to pursue the lifestyle that you have worked so hard to achieve. The established phase is also ripe with pitfalls. The biggest pitfall is complacency. Be aware, that during this phase, it very easy to rest on your laurels. Doing so will encourage a roller coaster type of business. Remember you should have name and brand recognition so keeping TOMA (Top of Mind Awareness) is the goal.

Your CPA should be helping you to minimize your tax bite and maximize your profits. Your business coach should help motivate you so you don’t rest on your laurels and help you establish goals. Those goals will help you decide whether to expand or wait until a stronger infrastructure is built, or a better economic climate presents.

Expansion Phase

This is usually created and driven by the owner. This phase will allow you to move into new markets and gain a larger market share. This phase has many pitfalls where money can be lost and/or wasted very easily if careful money management techniques are not deployed. Marketing during this phase should focus on the introduction of new complementary goods and services. This phase is very similar to the growth phase. Be extremely careful that you do not move into an unrelated business because the results can become disastrous.

For example, many successful business owners ventured into the real estate market during the boom of the early 2000’s only to find themselves in a heap of trouble when the bubble burst. The economic cycle is very important in this phase. Expansion during a recession or contraction of the economy must be done very carefully. Use your advisers to guide you with items like creative financing.

Mature Phase

This phase occurs when sales and profits are predictable, stable, and consistent. It is normal at this phase for revenue to start to fall off which forces the owner to either expand or exit. Marketing in this phase is aimed at keeping a steady flow of new customers. Usually, the business owner will be in business for 15-20 years so it is natural for the owner not to want to utilize active marketing.

The mature business has name recognition, an identity, and a positive place in the community. This phase lends itself to sponsoring opportunities, educational based marketing, and to guest lecture spots. Your business coach will help you create goals that will allow you to move to the next phase of business. Your accountant should be discussing your retirement needs. Your insurance limits need to be reviewed. At this point, the house is probably paid off and your children grown. You may be insuring more than you need to at this stage.

Exit Phase

The opportunity for you to cash out after all your years of hard work. Your advisers will be able to help guide you through this phase. Marketing will be to find the right buyer and create a smooth transition. Your accountant and business coach will be able to help you structure the best deal. Your attorney will create all legal documents for the transfer of sale.

Throughout all the business cycles your happiness and the happiness of your family is what matters. You deserve to have a well-balanced business and family life. A dynamic profitable business does not happen by itself; it has to be planned, created, nurtured and tended. The steps listed above should put you well on your way to achieving the business and success that you want and deserve.

Mistakes are very costly in both time and money. Use advisers and don’t rush. Do your analysis, know your economic cycle, market effectively and sit back and enjoy the fruits of your labor, you deserve it!

It does not matter if you are a new business owner just starting your business, or if you are a veteran owner in business for thirty years. If you rack up debt without a clear repayment plan you are asking for financial disaster. This article will teach you what you need to know about debt, how to use it wisely and how to avoid its alluring pitfalls.

Debt, according to Webster’s Dictionary is an amount of money that you owe to a person, bank, company, etc. If you can live by the rule never borrow money you will certainly be well on your way to achieving financial freedom. However it is to be noted that if you want to get an education, purchase or open a business, or, buy a home the likelihood of avoiding debt altogether is probably impossible; unless you have an uncle named Donald Trump.

There are two kinds of debt. Good debt and bad debt. Good debt by definition is an investment that will grow in value or generate long-term income. Taking out a loan to pay for a college education is the perfect example of good debt. Taking a mortgage that will buy a rental property that will give a positive cash flow is another example of good debt. Let’s make it even easier, good debt is borrowing money which will enable you to earn more money.

Bad debt by definition is debt incurred to purchase things that quickly lose their value and do not generate long-term income. Bad debt is also debt that carries a high interest rate, like credit card debt. The general rule to avoid bad debt is: If you can’t afford it and you don’t need it, don’t buy it. Examples of bad debt would be taking out a loan to buy a fancy car when a lower end model will get you from point A to point B just as well. Another example would be using student loan money to take a vacation or to buy fancy clothes. Let’s make the definition of bad debt easier; bad debt is borrowing money that will allow you to purchase goods or services that will not earn you more money but will lose their value. A car will depreciate and be worth less; a vacation while nice, will become a memory but the payments could live on for many years afterward. Now that you understand the definitions of debt, let’s take a look at some strategic approaches of managing debt.

• Please be advised that student loans are one of the riskiest types of debt that you can incur. Why? Student loans cannot be discharged in a bankruptcy. Student loan debt can and will follow you all the days of your life to the tune that they can garnish your social security check if they need to for repayment. Knowing that student loan debt comes with some serious risks means that you must use this type of debt VERY WISELY. Talk to a financial planner, accountants and others in the know for advice. This article is not intended to give you financial advice but rather give you information to take back to your financial advisers to see if they make sense for you. Please do not utilize any advice before you have your financial advisers evaluate it.
• Understand that when you get out of school you can incur anywhere from $200,000 and up in debt. That number scares me too, however with proper planning it is not insurmountable. Some ideas to discuss with your financial advisers would be:
• Having a family member or friend fund your education
• Using home equity lines of credit in place of student loans
• Taking the minimum amount of student loans
• Do not defer payment of your student loans any later than you absolutely need to. Remember that your loans are accruing interest. You want to pay them down as quickly as possible.

• Be willing to live very small when you first graduate. Eat at home instead of going to restaurants. Drive an inexpensive car or take public transportation whenever possible. The little things do add up. Get a notebook and write down where every nickel is spent. You will be surprised how much waste is in your daily routine. Then create a budget and STICK TO IT. Determine what income you will have against your expenses. Any overage should go into a special fund that is segregated from your checking account. It is called your emergency or cash on hand fund. This fund should be built up over time to equal at least one year’s living expenses.
• AVOID CREDIT CARD DEBT AT ALL COSTS. Paying interest charges of 19-25% is a sure way of creating financial ruin. I am serious when I say ride a bicycle or walk if you do not have gas money. Eat at a friend’s house or go to a shelter if you don’t have money for food. In no way should you deficit spend (spending money that you expect to earn or get in the future) on a credit card. The rule that I live by and that I have taught my family and clients is this: Unless you have the money in your checking account and plan on paying your credit card purchase in full at the end of the month do not use your card.
• Live below your means. Business owners have the ability to earn massive amounts of money. It is very easy to carve out a rich lifestyle of fancy cars, houses, etc. I am very much in favor of living an awesome lifestyle provided that you are not deficit spending. Deficit spending is using credit to obtain good and services with the intention that the money will be collected in the near future. This one fatal tactic has caused many once successful business owner to go bankrupt. The problem is if the money does not get collected you have got a BIG problem. If you learn nothing from this article learn DO NOT DEFICIT SPEND! You can only dificit spend if the spend is for good debt (that which will make you more money in the future, if the debt is at a low interest rate and if your present cash flow can support the bulk of the payment.
• Get professional help. Hire an accountant, attorney, coach, insurance agent and compliance company. Every professional listed has a unique and needed function. Do not forego obtaining help in any of those categories. Choose the right professionals by asking others who are successful for recommendations. Then make sure that you do a proper due-diligence and conduct a proper interview. If you do not resonate with the professional MOVE ON. The same goes if you feel pressured or if you feel that the professional does not have the proper plan for you, MOVE ON and keep searching for the right team.

• Establish Retirement Funds. The sure way to beat debt is to accumulate wealth. The sure way to wealth accumulation is establishing a retirement account and funding it to the max every year. Speak to your advisers about what the best type of account for you would be.

Your financial future is in your hands. The government will not be there to take care of you in retirement. If this article scares you, then I hope it scares you straight; straight into the land of knowledge. If you follow these tenets you will have a long profitable career; use debt wisely, live below your means, establish retirement accounts and fund them to the max, and obtain professional guidance.