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Want To Retire? You Better Start A Savings Program Soon

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We’re taught that the only good business is a big business. The truth is that for most business owners they will never have a big business. I think that for most business owners having the goal of a big business will just move them a very unhappy place.

First, there is no rule that you have to have a big business. A big business requires a thought process and skills that you might not have and might not even want to develop.  

You do want to choose a business model and size that fits for you. If you make the wrong choice, you can spend years spinning your wheels and not focusing on what’s important in your business or you.

Too many times I see business owners think their business will get them to retirement. The unfortunate fact is this is one of the myths that many business owners live with.

A true story

I had a client who started working with me. At first, she just wanted to learn how to make more money in her business. As time went on she decided that she wanted to grow her business.

The problem was she never really thought through what growing her business would mean to her personally. To her, growing her business meant adding more people and complexity.  

As it turned out, the right way to grow her business would have been to grow the amount of free cash she had and to save lots of it for retirement.

What you do need to focus on

If you have a small business there is nothing wrong with that. The issue with having a small business is you have to realize that you’ve really bought yourself a job. When you have a job, getting to retirement means saving for retirement.

Even if you are able to sell your business, it won’t provide you enough for retirement. If you want to figure out where you are, click here and get our free Ebook on the 4 Boxes of Financial Independence.

Let’s take a look at a business that might look a lot like yours.

Your business could have only one or two employees. You might bring in somewhere around $200,000 in gross revenue. After paying expenses you are left with $125,000 per year. After your living expenses, you are only left with a few thousand dollars per year for retirement savings.

You have a dream that when it’s your time to retire you can sell your business and ride off into the sunset of a happy retirement. However, if your business creates numbers like the one above, there is no way for you to sell your business and retire.

What the business would bring

If you could sell the business and you got top dollar for it, you might get around $600,000 for the business. You’re only going to get about 50% down and you’ll be holding paper for the other 50%. There’s a huge risk in just doing that.

That means that after taxes and expenses you would be left with maybe $400,000. If you take that money and invest it you could expect to spend between 3 and 4% of the principle every year. This would give you about $12 to $16,000 per year.

This is far less than the $125,000 you are spending today… even with Social Security you’re not going to come close to have a financially secure retirement.

You end up just keeping at it

Instead of selling your business you realize that the only way you can maintain a lifestyle that’s close to what you’re used to you’ll need to continue running your business forever.

You don’t have to do this. It’s the result that lots of business owners get just because they don’t think all of the way through what their end game looks like.

It’s what you’re going to get unless you take steps that allow you to retire.

What you need to do

If you ever want to leave your business and you run a small operation, you’re going to have to think about what’s going to happen twenty or thirty years down the road. You’re going to have to become a regular saver.

You’re going to have to think of yourself as an employee and not a business owner who has an asset that’s going to allow them to retire in comfort.

I want you to think about saving at least 20% of what you make every year. If you do that for a long period of time, you’ll have put away enough to retire comfortably. Instead of being able to spend a few thousand dollars a year, you’re going to have a chance to maintain the lifestyle you presently have.

You need to find a financial planner that’s going to help you figure out what it’s going to take for you to retire. You might be depressed after the initial analysis.

Your choice is to stay depressed or do something about it. I’m hoping that you’ll choose the later and put together a savings program that will get you comfortably to retirement.

Being your own boss is a great thing. Working for yourself and serving your customers can be really satisfying. Just do me a favor. Please remember that you’re going to be old someday… and you’re going to want to have financial security.  It’s part of what it takes to successfully run your own business.

What do you think? Are you willing to get out of your comfort zone and really see what’s in store for your retirement?

Why don’t you leave a comment below and let me know what you think.

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About the author:

Josh PatrickJosh Patrick is a certified Book Yourself Solid® coach and serial entrepreneur who lives in Vermont with his wife Suzanne, their two dogs and a cat. You can read his blog posts, listen to his podcasts and view his videos at www.askjoshpatrick.com.

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Target Market: Are You a Shark or a Dolphin?

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So often when I ask coaches and consultants who their target market is, they answer in a vague and generic way.

I was one of those coaches.

Five years ago, if someone asked me who my target market was, I answered:

“I help women with a comfortable lifestyle, who still feel that something is missing in their lives, articulate the missing link and fill that void”

Yes, at the time, I was a life coach and my target market was literally everywhere.

I thought that was perfect. But after a few months, I only enrolled one new client.

Yes, only one.

Frustrated and impatient, I was tempted to declare that defining a target market didn’t work.

Then, I understood that I had not truly defined a target market.

If my potential clients were everywhere, then they might as well be nowhere.

Read more >

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Are People Going to Hate Me for Saying This?

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A few weeks ago, I had a conversation with a very successful leadership coach who has been working with global organizations for more than twenty years.

When we talked about what’s next for her, she shared with me that she is working with a few MBA schools. She really enjoys that. It’s something that she wanted to do more of.

I could see the flickering in her eyes when she talked about the students and the impact she can have by working with these business schools.

Then, I asked her what her challenge is with working with more of those MBA schools. She said that it’s hard for her to get into these schools because they are a very closed community. You can only get into it through relationships,  and that she didn’t know many people in that field yet.

She also mentioned that many MBA schools are stuck with yesterday’s model of coaching because they only accept certain methodologies that have been approved by academia.

She went on talking about why it’s insane to limit coaching within an organization to just a few methodologies and not focus on the outcome and impact.

That’s when the challenger in me took over. I asked “Have you ever published about this? Have you ever publicly talked about why it’s fatal for these business schools to rely on yesterday’s model of coaching?”

She told me that she had thought about it but never publicly talked about it.

When I asked her why, she told me that she was afraid that the leaders of these business schools would hate her for saying this.

I told her that every market is divided into different categories. Read more >

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Why You Need A Real One

realOne

What would it be like if you could attract – effortlessly – all of the business that you wanted and could handle?

Think of the income that you could make… and the freedom that you would enjoy!

What would it be like if you had no competition?

Well, the truth is… that you don’t. And you could have all the income, freedom and clients you want. So long as you have a brand strategy.

A REAL brand strategy.

Most service providers think that their branding is about their resume or their areas of expertise; some think it’s their logo or their letterhead or their fancy web design. Read more >

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The 4 Most Critical Things To Do Now On Your LinkedIn Profile To Start Attracting Ideal Clients

 

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Most people think LinkedIn is a resume dump (and thus use it that way). They don’t realize it could be a powerful place to be self-expressed and actually attract ideal clients (versus people who just wanna SPAM you).

If you’re a reading this, you’re likely a service professional, a coach, consultant, freelancer, or someone who doesn’t just want to have recruiters sending you messages. You spend time on social media so you can find ideal clients, position yourself to have successful sales conversations, and ultimately generate profits!

Without further ado…

Here are the 4 most critical things you can do NOW to change up your Linked In game today: Read more >

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