Business & Entrepreneurship – Page 10

Retirement Planning for the Small Business Owner

Why does the small business owner avoid thinking about retirement planning? Two vivid reasons come to mind: 1) lack of cash, and 2) they assume there is plenty of time, so it can be deferred until the proverbial "tomorrow." Wrong, Wrong, Wrong! The following Table illustrates why "later" is such a drastic mistake.

Savings Goal	Time Frame	Necessary Investment
$250K	30 years	$168/month
$250K	20 years	$424/month
$250K	10 years	$1,367/month
$250K	5 years	$3402/month

Based upon an assumption of equal monthly installments earning 8% compounded monthly over the stated periods.

The two middle examples depict the different monthly investment between a 40-year-old and a 50-year-old to achieve the same amount by age 60. The latter requires over three times as much as the former.

This next example displays the value of time, and what a difference "time" can make in our investment strategies. An early saver deposits $1,000 a year ($83.33 per month) at 8% for just 10 years- nothing more is saved. A late starter does not save anything for ten years and then begins $1,000 a year savings program for forty years. Hence the late saver does not attain the same goal, as Table 2 exhibits.

Year	$1K Deposit @ 8%	Zero Deposit
1 5 10	$1,083 $6,397 $15,939	0 0 0
Year	Build @ 8%	$1K Deposit @ 8%
11 20 30 40 50	$17,267 $35,471 $78,934, $175,656 $390,895	$1,083 $15,939 $51,939 $130,344 $306,000

Now to the topic of "not enough cash" or even worse "no cash". Turn the negative around to the following mantra: " A part of all I earn is mine to keep," and make it real.

The next step requires payment to yourself first. This is a toughie, and may need a concerted effort to "find" money for savings. Here are a few ideas:

When your prices are raised, save the difference. This is the self-employed equivalent to the employee's " when I get a raise, save it".
Examine current outgo for an area with excessive or unnecessary spending. For example: brown bag lunch one day a week versus buying lunch, or one less dining-out monthly expense, or buying clothing more selectively and fewer times during the year.
Place change in a jar daily; I do and save about $500 a year.
Save a tax refund.
Use grocery coupons and drop the coins in a savings jar.
Get a rebate on a purchase, and place this into the jar.
Take $5 from every ATM withdrawal and give it to the jar.

You see the idea, now look for other ways. The third step is: don't waste energy on worrying about not doing anything before; just resolve to do something now! (And then Do It.)

©1996 Fran Roth

Daily Planning

This time of year I feel a stronger urge to hibernate than any other, a desire to be still and enjoy these precious days when the sun arcs across the southern sky and fills my kitchen. I'm drawn to sit there, like a cat, or to work quietly in my journal.

But the days in which I work-for clients, employers, friends, myself–I revert to a time management tool I learned in a goal setting class many years ago, daily planning. Since learning it (and even teaching it in time management classes for a couple of years), I've found it to be the simplest "trick" for getting tasks prioritized and accomplished.

Start by gathering your calendars and "to-do" lists.
On your calendar pages for the next week, write down all the things you are already scheduled to do in the times they're scheduled-business appointment, dentist appointments, and driving the carpool. Don't forget preparation time for business appointments.
Next, block out time each day (preferably in the morning) that you would like to have a ten-minute daily planning session with yourself in which you'll do this exercise. Make sure it's at a time that you can work uninterrupted. Write it in the appropriate time on your calendar. Then commit yourself to keeping this appointment!
Now look at the rest of the list and think about your schedule for the next few days. Write tasks on the daily calendar only when you think you can realistically accomplish them. For instance, if you have several errands to run, write them together on the day when you anticipate having time for them.
If you have a big project to get ready for next week, include a small block of time each day to accomplish part of it.
Can any of your tasks be delegated to someone else?
Make sure each day contains some personal as well as professional tasks-time with your children, spouse, friends, yourself. Adding personal "appointment" it a good way to balance your calendar and your life. Be sure to put the family appointment on your calendar–kids'' plays, spouse's business dinners, movies.
Use your daily planner as a tickler file-when someone's birthday is coming up, write a note the week before to buy a birthday card.
Try to keep from moving unfinished tasks forward everyday. Instead, during your daily planning session, thoughtfully consider when you can really accomplish something. If you find you're moving a task forward every day, write the task on a post-it or on a bigger goals list-this may not be the season you really want to accomplish it!

This is the bare-bones list, and if you just do this daily planning exercise at the same time everyday, you'll be amazed at the "extra" time you seem to create for yourself.

FELIX THE FLYING FROG – A Parable About Modern Management

Once upon a time, there lived a man named Clarence who had a pet frog named Felix. Clarence lived a modestly comfortable existence on what he earned working at the Wal-Mart, but he always dreamed of being rich.

"Felix!" he said one day, hit by sudden inspiration, "We're going to be rich! I will teach you to fly!"

Felix, of course, was terrified at the prospect. "I can't fly, you twit! I'm a frog, not a canary!"

Clarence, disappointed at the initial response, told Felix: "That negative attitude of yours could be a real problem. I'm sending you to class." So Felix went to a three-day course and learned about problem solving, time management, and effective communication — but nothing about flying.

On the first day of the "flying lessons," Clarence could barely control his excitement. Clarence explained that their apartment building had 15 floors, and each day Felix would jump out of a window, starting with the first floor and eventually getting to the top floor.

After each jump, Felix would analyze how well he flew, isolate the most effective flying techniques, and implement the improved process for the next flight. By the time they reached the top floor, Felix would surely be able to fly.

Felix pleaded for his life, but his pleas fell on deaf ears. "He just doesn't understand how important this is," thought Clarence. "He can't see the big picture."

So, with that, Clarence opened the window and threw Felix out. He landed with a thud.

The next day, poised for his second flying lesson, Felix again begged not to be thrown out of the window. Clarence opened his pocket guide to "Managing More Effectively," and showed Felix the part about how one must always expect resistance when introducing new, innovative programs.

With that, he threw Felix out the window — THUD!

On the third day (at the third floor), Felix tried a different ploy: stalling. He asked for a delay in the "project" until better weather would make flying conditions more favorable.

But Clarence was ready for him: He produced a timeline and pointed to the third Milestone and asked. "You don't want to slip up the schedule, do you?"

From his training, Felix knew that not jumping today would only mean that he would have to jump TWICE tomorrow. So he just muttered, "OK, yeeha, let's go." And out the window he went.

Now this is not to say that Felix wasn't trying his best. On the fifth day he flapped his legs madly in a vain attempt at flying. On the sixth day, he tied a small red cape around his neck and tried to think "Superman" thoughts.

It didn't help.

By the seventh day, Felix, accepting his fate, no longer begged for mercy. He simply looked at Clarence and said, "You know you're killing me, don't you?"

Clarence pointed out that Felix's performance so far had been less than exemplary, failing to meet any of the milestone goals he had set for him. With that, Felix said quietly, "Shut up and open the window," and he leaped out, taking careful aim at the large jagged rock by the corner of the building.

And Felix went to that great lily pad in the sky.

Clarence was extremely upset, as his project had failed to meet a single objective that he had set out to accomplish. Felix had not only failed to fly, he hadn't even learned to steer his fall as he dropped like a sack of cement, nor had he heeded Clarence's advice to "Fall smarter, not harder."

The only thing left for Clarence to do was to analyze the process and try to determine where it had gone wrong.

After much thought, Clarence smiled and said… "Next time, I'm getting a smarter frog!"

____________Notes: Manager as Coach_______________
While there are many potential solutions to existing challenges, it's vitally important to create true dialogue with your employees, clients, customers. Using a traditional or standardized approach sometimes misses the obvious. When we're willing to hear feedback from the people who are most personally involved, they often have solutions and will share insight that we, in our desire to "create results," might otherwise miss. So ask yourself, how good is your "listening reflex?"

Create Reserves That Support You

NOTE: This article was originally written in 1999. It is still relevant today.

With Y2K looming, several groups encouraged us to have reserves of food and water available. Of course here on the Northern Coast of California we all know very well the importance of emergency supplies for power outages and earthquakes.

But how many of us have reserves in other parts of our lives? I sometimes buy the 4-pack so I have extras, and when I used to travel a lot, I had a full set of personal toiletries always ready to go. A couple of years ago I discovered the hard way that I need to always keep at least one extra month's supply of my vitamins – the supplier ran out and there was none to be had for a full month.

Well, how about in our careers and work life? Do you have an extra set of clothes ready in case you spill your morning coffee?? How about an extra set of car keys in case you misplace the ones you usually use? Do you fill your tank up with gasoline when it gets to half-empty? (I learned about that one with the 1989 Loma Prieta earthquake that took out all the power in the Bay Area and my only vehicle was on empty!!)

How about work – do you make back-ups of your important files on a regular basis? Just think about how much of your daily work you would like to have to recreate, and that'll tell you how often to back-up your computer files. Do you start each day with a basic plan so you know how much time you have available for each project? Do you build in time (every day) for emergency interruptions? You know they're going to happen. Do you have extra vacation and/or sick leave built up in case you need to take it? Are you putting money away for retirement?

And do you allow yourself enough time to finish projects so you are not rushed at the end? One of the keys to making sure your "customer" is satisfied is to under-promise and over-deliver.

How do you do that? When taking on a project, build in a cushion of time. While it's true that you might be able to complete a task or project in a day or a week (if everything goes right), we all know about the unexpected things that happen – the fire in the building (that was us!!), the key person whose son gets ill and is unavailable for 3 days, the computer that crashes or locks up and won't let you finish, the materials that came in late.

By allowing extra time, we have room for the unexpected to simply be an inconvenience rather than a catastrophe. Because we've built in extra time, we are in a better position to discover another way to finish the project or resolve the situation.

And if we finish early, we get to be heroes!! How did you feel the last time someone told you they'd have something to you within a week, but you actually got it two weeks later? How differently would you have felt if they told you it would take three weeks and then you received it a week early? It's the same time frame, but the perception is very different.

There are many places in our lives where a reserve would reduce worry, provide more satisfaction, make life easier and let us feel more powerful. As you identify those areas, begin to take the steps to build that reserve for yourself. You don't have to do everything at once, just start somewhere. And notice how much it adds to your sense of wellbeing in the world when you realize you don't have to worry about things because you are prepared.