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BLOG 13: RETIREMENT REVISITED
OK, I would be remiss if I did not once again speak to this RETIREMENT dilemma, especially after reading the two articles referenced below from which I have extracted excerpts; however, much of what is being rewritten below echoes what I have already said in my previous Blog (10), such as: FROM HEALTH PARTNERS RELEASE 5/25/17 A Merrill Lynch survey indicated that more than ¾ of workers over 50 said they would most likely continue working long after their formal retirement. The article also cited reasons why these retirees will most likely continue to work, among which are: Their retirement funds will probably not be enough to live comfortably, especially if Social Security is reduced or eliminated and inflation continues to rise. Many RETIREES elect just to stay engaged in their own profession or learning a new one, which is where my firm RONALDMITCHELLETTEANDASSOCIATES.COM comes into play, since we advise or consult many retirees on what to do next; that is, buy an existing company, partner and/or invest in an existing company or even a startup, all of which captures the interest of our clients to the point that they find a new life, literally REINVENTING THEMSELVES to the delight of their spouse and their family and friends from whom they even raise additional capital to support their venture. The survey also indicated that retirees come from special jobs and training and feel that they want to continue to use their hard earned skills after retirement, why waste 30, 40 years down the drain? Some folks don’t even wait until they reach the formal retirement age; they just bail-out of corporate America early to escape the “rat-race” and “office politics.” The above article went on to say that other considerations why folks are reluctant to retire are their reflections of what happen to their parents when they retired and how many of them just withered away and died and that fear alone is impetus enough to motivate today’s retiree to think about what to do with their next twenty years plus on this planet? There is just so much golf or other activity available and still more time than money to do something beneficial for themselves right up to and through their eighties. I am a perfect example of this, since I just turned 81 and I am going strong with a successful consulting practice (25 years), in very good health and strength train 4 days/week and most of all, I love what I do, whether I am consulting for a fee or giving pro-bono lectures along with book signings or just talking about my experiences. FROM A MOOTY ARTICLE “THE RETIREMENT CRISIS” 5/25/17 There are 238 million Americans retired or about to retire representing 74% of our total population placing an enormous financial burden on our federal, state and local retirement benefits, which at last count was $3.5 Trillion and add the federal government’s retirement benefit commitment of another $3.5 trillion and we are up to $7 trillion of unfunded benefits that could dissipate anytime for reasons ranging from benefit cancellation to benefit reduction. Now, there’s more! And that is the unfunded Social Security obligations of $13.4 trillion owed to 232 million recipients, caused mainly from the fact “we are all living too damn long.” FROM RON MITCHELLETTE’S RETIREMENT VIEWS 5/25/17 Bottom line! Current retirees are owed a whopping $20 trillion, nearly $6 trillion more that the entire national debt of our country and YOU THINK YOU ARE GOING TO RETIRE-THINK AGAIN! Your planned income stream is likely in jeopardy, so the Gold watch of yesteryear and the likelihood of a continued adequate income stream in the current years may become a nightmare. Again, I can only fallback on my own experiences with my clients and prospects and that “RETIREMENT” is not an option for most, even though, in some cases, I meet well-healed folks, who do want to stay busy as a “retirepreneur” but for the most part the people with whom I come into contact are looking for an extra source of income and a chance to continue to use their experience and moxie to stay busy and maybe even leave a family legacy. RONALD MITCHELLETTE-AUTHOR 7/9/17
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BLOG 12: BABY BOOMERS VS MILLENNIALS
I just attended a gathering on the above subject and was amazed with the content of the speech, practically discharging Baby Boomers as irrelevant and gave many kudos to the Millennials. What was funny about this discussion was the audience was a mixed-bag of both generations much like my client base and inquiries, some of which have become prospects, hopefully turning into clients at some point. I find that both generations have their own agenda; the millennials, want to be the next “Zukerman” and the baby boomers are trying to figure-out how to CONTROL THEIR OWN DESTINY, especially witnessing their friends, and in many cases themselves, being laid-off or passed-up for a promotion or just being fired at the age of 50/60 with minimal prospects for an honorable job, unless they take an under-qualified position, which is more demeaning than no job, if it were not for the need for cash flow. My client base is across the broad spectrum of ventures including a millennial, who as we would expect, developing an App for car repairs, a mid-lifer with an ingenious fully granted patent to preserve foods, a retiree fulfilling a life ambition to have an effective teenage addiction prevention website, a senior widow, who is part of a group trying to raise money to take a stage play to Broadway, a patent pending cancer detecting vest designed by another mid-lifer, plus a group of middle-aged men and one women looking to buy companies for themselves as a hedge against the likelihood of what I referred to in the above paragraph, being downsized et al out of a job. The dilemma for professionals like myself is that the millennials have the smarts but no cash and consultants have little choice but to take on these projects as a Success Fee, no retainers or find individual investors from the venture community and in some cases from the baby-boomers looking for that “Pie-in-the-Sky” retirement goldmine. The other areas of concern are the experience factor. The millennials have very little and the baby boomers have plenty, which begs the question, how do we or can we merge the exuberance and youth of the millennials with the professional baby boomer? This is what we also do at Mitchellette and Associates, that is, link the two generations together into an awesome team, promoting the idea of the millennial and the experience of the baby boomer and his/her financial resources. Much has been and will be written on this subject but the bottom line is a more concentrated focus on merging the two forces together. Quite often, I even find myself taking on pro-bono assignments to help both generations, depending on the arrangement. Even in the preliminary stages when I am being interviewed, I often find myself giving more advice than necessary, without compensation, as part of the “Goodwill factor” or just the “give-back” factor. I have been writing several Blogs on RETIREMENT so my advice on the title subject is for both generations to connect through various Meet Up groups and other networking events whereby the millennial is the aggressive party intermingling with the more adult generation forming a productive association and/or connecting with us (www.ronaldmitchelletteandassociates.com). BLOG 11: NEVER TO OLD
Retire-preneurial is a word I just coined, along with the many other derivatives of the key word-entrepreneur, which will hopefully resonate with the millions of Americans finding themselves not having adequately planned for their retirement, some had choices but many had no choice and did not realize with the extended life we enjoy, thanks to modern medicine and a more disciplined life style, we are living healthier and longer and that means needing more money to sustain us as we approach the end, whenever that calling comes. This observation is no more evident than to sit in a hospital or clinic waiting room and note that 4 out of 5 people coming into the area are fairly old, like into their 70s and are taking care of themselves with annual checkups and preventative procedures. Yes, the good news is science and our modern life style has helped us reach productive lives well into our 90's but the bad news for many of us, is that we may well run-out of money before our passing away as there are too many obstacles we will encounter; such as, natural aging, catastrophic events, unexpected illnesses, car repairs, health insurance or replacement and family problems ranging from the kids and/or the grandchildren needing financial help, to relax like our parents were taught. Yes, you probably planned to live or retire on Social Security and the equity in your home, when you sell it, including the investments and savings you made, in addition to other fixed revenue producers; such as, work related retirement funds and even from former military pay but it does not take a rocket scientist to figure out at a rate of $75K to $100K/year, which is my estimated annual income, to live somewhat as comfortable as when you had a career job, you probably have 10 years, under the present scenario, before the money sources begin to dry-up, not counting your SS status, which is an unknown ongoing political football. So what is being created is somewhat of a conundrum, as we get older our funds begin to deplete while we live longer with no compensating balances, unless we resort to other ancillary revenue producers; such as, extra full or part-time work, which begs the question, what kind of work? Well if you have been in business maybe you might want to consider consulting, a teacher doing part-time teaching or home-tutoring, a craftsman doing part-time home repairs or renovation, a nurse doing part-time work, a skilled mechanic working on cars even selling them; on and on, there are just too many options not to take advantage of them. In fact, I am receiving more and more calls from both men and women in their sixties and above to help them decide on a business to buy or start. Some of these inquiries actually turn into clients, like one of my clients now getting ready to launch a very personal online teenage addiction identification and assistance program; another, invented and patented a special food canister for vending machines giving longer life to vending machine food stuffs and another creating an online car repair search app; in addition to beauty shops, and existing business purchases for the retiree and his next generation. My list is lengthy including food recipes, upgraded GPS systems, special golf club driver and ball, double canvas zipper for the marine industry and online businesses like selling imported model ships and homemade women’s embellished clothing and don't forget grandma’s cookie recipes and the like, and there are always Arts and Crafts shows that can produce a reasonable ROI, just go to them and see booth after booth of cottage industry endeavors; even the Internet offers plenty of creative options to pursue, at home, without leaving the house. The truth is, it is never too late to undo the mistakes of the past or still plan for the future. If you are 60 you still have 20 or more great years left to do something, even volunteering for a worthy cause and if you throw-in working-out, cardio and stretch programs, biking and speed walking plus modern energy enhancements you can drink to replace protein, testosterone iron etc., you could live to a hundred, which 72 years ago when social security was created, no one thought anybody would live beyond 60. Ronald Mitchellette RONALD MITCHELLETTE & ASSOCIATES, LLC Founder President 2730 West Lake St., Ste.905 Minneapolis, MN. 55416 Direct: 612 715 9217 Office: 612 236 4248 email:rmitchellette@aol.com www.mitchelletteandassociates.com (Website) www.linkedin.com/in/ronmitchellette www.facebook.com/ronmitchelletteauthor www.barnesandnoble.com (Search Box Enter "Entrepreneurial Decision Making") BLOG 10: RETIRE-PRENEUR
Several months ago, I wrote Blog 8 “80 is the new 60” and there is no question about it! We are living longer and healthier than ever, certainly longer than our parents, in most cases. The gyms are full of seniors doing everything from strength training to cardio and stretch exercises. We take pills to supplement calcium, iron, relief from Arthritis, restless leg syndrome, assorted aches and pains, and in some folks to help out in bed has compelled me to coin a new compound word “Retire-preneur,” which hopefully will resonate with the millions of Americans, finding themselves, not having planned for their retirement, Our Retire-preneur just did not realize that the average net income for retirees was/is far greater than their Social Security check and a few other income sources; such as some work related retirement income, military benefits and investments/savings income. I would estimate a minimum income of $75,000 to even come close to a life style to which the average Retire-preneneur could live a life style to which he/she has become accustomed while they were gainfully employed. The truth is, it is too late to undo the mistakes of the past. Yes, you should have saved more and invested wisely, not spent beyond your means, not taken those family and couple vacations that cost a bundle with only aged photos to tell you how much fun you had but can’t buy a loaf of bread with its value and maybe you did not need to buy a new car every five years or worse buy a car you could least afford. There is also one other thing on which I think I will receive a lot of flak, though knightly, and that is paying for your kid’s college education in dollars you wish you had now in retirement. Face it, you probably worked your way through college as did I and it did not hurt us a bit; in fact, it gave us an early work ethic and appreciation of a buck, so all those kids now protesting would be working instead of having the free time to protest. Whatever, the reason, here you are still paying a mortgage or rent in a decent place, enjoying productive trips to the grocery store and that weekly stop at the liquor store and even eating out at a nice place more than you should, like the good old days, and even though you do not have the kids around you anymore; you now have the grandkids and strangely enough they cost as much with inflation as what your kids cost back twenty years ago and you are not making enough money to compensate for the shortfall, yes, I know it is worth it. So here you and your spouse sit, contemplating what you should be doing to earn extra income. You both are retired, in your seventies or more, aging ailments are eating up more than you would like, car repairs beginning to nickel and dime you to the poor house and speaking of the poor house that may well be all you can afford when the time comes and it is coming too soon, which means you need to have additional insurance to cover burial and/or cremation expense, even with Obama or Trump Care. My advice, which comes from my own solution, is to create your own business and therefore your own destiny, just as if you were thinking of doing when you were forty, fifty or sixty and at seventy or even eighty there is still time, don’t scoff, especially if the business you start involves all the years of your experience in an advisory or a consultant capacity and if you were in the trades, there are plenty of home-repair/renovations jobs searching for help; not to mention car repair if that was your trade? Ok, you get the idea and speaking of ideas, two of my clients are in their sixties and one just invented a food canister with a ninety-day life cycle and the other a “Cause Celebre” for online teenage addiction assistance. Then there is myself with a consulting practice, and my own working website which you have just logged onto. In my own case; I thoroughly enjoy mentoring my start-up clients and helping grow existing businesses including refinancing and acquisitions, and I would be remiss if I didn't say the extra money is the "icing on the cake". There are plenty of other income potential options: such as, making and selling the dozens of Grandma recipes or as my mate and I started an online website selling imported ship models, again, speaking of online, what a fantastic opportunity to work right from home that our parents did not have as we can build or create just about anything our imagination can create and if all of the above venues do not work there is always art or craft shows with reasonable entry fees from where you can make some very decent income. There is no excuse anymore to sit ideally by and complain about income or the lack thereof, when we have so many options to explore; besides, keeping the mind and body as fit as possible will add even more years to enjoy those growing grandchildren. Enjoy! Ronald Mitchellette RONALD MITCHELLETTE & ASSOCIATES, LLC Founder President 2730 West Lake St., Ste.905 Minneapolis, MN. 55416 Direct: 612 715 9217 Office: 612 236 4248 email:rmitchellette@aol.com www.mitchelletteandassociates.com (Website) www.linkedin.com/in/ronmitchellette www.facebook.com/ronmitchelletteauthor www.barnesandnoble.com (Search Box Enter "Entrepreneurial Decision Making") Blog 9 : BUSINESS PLAN CREATION OR REVIVAL
Your choice is stay the same and not grow and face emanate death or create a current business plan to decide whether you Change Directions or Stay the Course? Everything changes during this seasonal time of the year; as such, it is time for you and your business to consider changes, too. The season changes from winter to spring it is time to be introspective as it relates to your business; Soon, you will be assembling all your documents for the 2016 tax returns and while you are searching for those documents, try and find your original business plan, if you even ever had one. Oh, you never had a business plan or you haven’t looked at it for years and have been flying by the seat of your pants but doing OK, then prepare to crash land for the weather is unpredictable and you do not have a backup or an alternative plan, like a second motor, better start praying. This time of the year is also a good time to assess your progress or decay. What you are doing right and what you need to change, all of which should be documented and translated into an active business plan. We need to analyze and determine our path to further success and set our goals. Has your business kept the same focus or have you wandered off the original path? Sometimes there are things that happen, a shift or a challenge, that leads us in a different direction and we drift off course. We lose our original vision. Other times, there are good things that happen and they take us in a positive direction, which may be better than expected; nevertheless, you need to determine the direction and pace with which you are moving toward achieving your vision or assess where you may have drifted off course. If you are not satisfied with your direction or speed to meet your goals, then change your course as quickly as you can by calling in a professional consulting firm, MITCHELLETTE & ASSOCIATES, (www.mitchelletteandassociates.com). They know how to prepare a meaningful business plan or call it a strategic plan, either way it will keep you on course for any audience, whether you are considering refinancing and need an investor or a finance company. A business plan or strategic plan will help you create and implement, marketing strategies & direction, locate synergy partners, even hiring the best and brightest for your company. You can be sure, if you have fallen off course, you will be righted again and live and prosper armed with a business roadmap, we call a BUSINESS PLAN, with steps you need to get moving in the right direction again. Please, whatever you do; do not buy or download a business plan template as they are worthless. There is no such thing as a generic business plan! Each plan must be tailored to its intended audience; such as, a banker to finance a project or an acquisition partner or as this article suggests, just for your own benefit. Your plan will include setting new goals, new benchmarks, new tools even a safety net where applicable, and resources to keep yon on course so you can keep and grow your business and be prepared for any kind of weather or market turn-down and “God” forbid catastrophic event like a major storm at sea and your compass is malfunctioning-just get that plan for what to do next! Don’t wait until it is too late! Determine NOW if you will change direction or stay the course or call for the Harbor Master to guide you in safely. MITCHELLETTEANDASSOCIATES.COM RONALD MITCHELLETTE-FOUNDER/CEO BUSINESS CONSULTANTS (SINCE 1995) Blog 8; Entrepreneurial Journey
Yes, we understand I borrowed the title from Darwin; however, after spending nearly 40 years working with entrepreneurs in both academic and business pursuits, I still do not have an answer as to "The Origin of the Specie,” in this case, an Entrepreneur? I tried to find the answer in my Doctoral hypothesis "Entrepreneurs Are Born Not Made" with over 300 formal interviews of both gender-entrepreneurs, and counting. I have been lending money and giving advice to entrepreneurs as a banker and consultant, writing curricula and teaching graduate courses on the subject and ultimately authoring a book titled "Entrepreneurial Decision Making" and I still do not have a definitive answer and there just may not be an answer; at least one that fits all! Let me begin with my own entrepreneurial journey because I had been an entrepreneur boot-strapping a start-up and taking it public (IPO) before I sold the company and sandwiched Corporate America in between my personal entrepreneurial endeavors, and starting an investment firm dedicated to purchasing financially weak banks and Mutual Funds, which we did before I sold my holdings in 1995 and started my present 20 year old FULL SERVICE business consulting firm, MITCHELLETTE & ASSOCIATES, and moved from San Diego to Minneapolis. I have had the good fortune of being part of successful start-ups growing and/or saving good companies and their families; however, I have also witnessed, all too often, the collapse of a company followed by a similar fate for the family of the entrepreneur. I have even been a precipitator of bringing the local sheriff to the business and home of a business borrower in default to take possession of all their assets and that was something I could live without forever. I even had to give one of my homes back to the bank to cover their perceived under collateralized loan, only as referenced above, to successfully take that same company public with a new lender and some additional investors. I was, and continue to be, my own (turn-around) specialist and have used the same principles that saved my own company from disaster, to saving many of the companies of my clients from their own disaster. I have definitely lived in and through the battles facing most entrepreneurs, which is why I am so adamant about helping entrepreneurs get through their own struggles and that can only be done if one has personal experience with the problem and the solution. So here is the bottom line. I haven’t solved my own doctoral hypothesis and probably never will; needless to say, there are just too many reasons we become entrepreneurs but here are some questions to ask yourself to better understand why you are who you are as Decarte said “I am who I am.”
This is why I have dedicated my late years hoping to help aspiring and established entrepreneurs increase their probability of success by researching and writing about entrepreneurs and the subject of Entrepreneurship. My own M & B test indicates that I am an ESTP (EXTROVERT- SENSING THINKING-PERCIEVER), which makes sense but provides little direction as to what to become, only that I probably would not be satisfied sitting in a cube office 10 hours a day for twenty+years. Sure, there are career coaches, who would have told me that I should be an attorney (my college choice) or in sales or a soldier et al but how many would have been nervy enough to tell me to be an entrepreneur? Back to the conclusion of my doctoral research, which, I am sure, you have been waiting to hear. The male specie appears to be pre-disposed to characteristics that can direct him toward becoming an entrepreneur, including his historic early life GENE POOL as a Hunter Gather; however, our female sisters appear to become entrepreneurs by environmental forces; such as, divorce or death of a spouse and "Necessity the Mother of Invention" forces them into a survival entrepreneurial role and they are more successful than men in start-ups by 2 to 1. Although that latter conclusion (1998) is outdated as today’s contemporary women is no longer in that survive or else mode, she actively decides, who she wants to be and when, if at all. Nevertheless, if she chooses to become an entrepreneur she will probably be armed with an MBA and the knowledge that her male counter-part is statistically not as successful as her sisters as entrepreneurs. Now, all that being said, testing, introspection and my advice in my book, we still do not know, but can only make an educated guess as to, who will become an entrepreneur, under what circumstances and who has a better chance of succeeding as an entrepreneur? Conclusion, in final analysis it is life's journey and the cards we are dealt and how we deal with them that ultimately determines our entrepreneurial choices, sometimes it may be a firing or lack of promotion or rightful recognition from an employer/job or a once in a lifetime opportunity and even something as simple as an accidental discovery/invention. Nevertheless, the sooner my book is read and understood the better prepared you will be to make sound choices and seek the help and advice of a professional business consulting firm such as MITCHELLETTE & ASSOCIATES. BLOG 7: RETIREMENT
80 is the new 60 Ok, you have either just been fired and are over 50 or you lasted long enough to retire in the company for which you worked for 20+ years or you may have recently sold or merged your own company. In any of the preceding scenarios you are facing the challenges of vocation vs vacation and the former is what you have become accustomed to, not the latter, which may be completely foreign to you; especially if you were the type that had to contact your business on an hourly basis every day while on your vacation. However, you find yourself thinking about or functioning in RETIREMENT you are in the mode of considering what you will do when that day arrives or has arrived; regardless of either, you will or you are about to do all your due-diligence; such as, cashing in on the house, payoff the car(s), update your health and asset insurance coverage, established an effective investment portfolio and savings account but what you did not plan for is your idle time and proper use of brain matter or lack thereof, which may be worse than poor financial planning. We live in an age where we live longer and enjoy better health even though companies themselves are still bent on giving you a gold watch and/or a modest retirement fund, while suggesting to you that you have reached the age wisdom and are of no use to them any longer (sarchasm). Yes, your once dream of playing wall to wall golf or travelling the world has become a burden even a “pain-in-the-ass;” in spite of not having to worry about snow removal, lawn grooming and home maintenance, as the loss of any of the above chores have not been able to fill the mind with replacement cognitive thought; such as, continued accomplishment or success as we once defined it. In addition to the above there is the simple fact that you may need to work well beyond your designated retirement age even if you did plan moderately well as the cost of living keeps creeping up and the grandchildren or even your own kids need financial help, even the car that you paid for is not working just right as it too needs to be retired, more so than you, so back to work we go! We can work for dollars or volunteer, even some of you have contacted my business consulting firm looking for a company to buy and/or in which to invest with the idea being you can serve as a quasi CEO or Board of Advisors keeping your brain active while possibly improving your net worth and that feels good! That is what happened to me since I retired after I sold my bank. I played enough golf to buy a new car only to witness no improvement in my game. Armed with 50+ years of business experience and savvy, I decided to restart my teaching graduate courses in entrepreneurship and finance at several West Coast, where I was living, Universities, only to be asked for after-hour advice from many of my adult graduate students, which became the catalyst for me to once again start my fourth business venture, which has morphed into my current business consulting firm. FYI: I have been doing considerable speaking on the subject of RETIREMENT and preparing to write my third book on the subject as an extension of my first two books on Entrepreneurship. Blog6. Succession
Blog 5. FAMILY OWNED BUSINESS (FOB)
According to the Harvard Business Review, 70% of family owned businesses FAIL or SOLD before the SECOND generation has the opportunity to assume ownership and/or operational authority. Also, only 10% of first generation businesses reach the third generation! While the above statistics are daunting, family owned businesses can survive and grow with, not only, the help of outside management consultants, but also, employing survival skills; such as, refinancing, M & A options, culture changes, generation transfer, including the 50% Inheritance Tax issues. Although our practice does not directly solicit FOB’s we are forever involved with either struggling small first and second generation businesses and/or thriving FOB’s that have reached a plateau and cannot grow. In either case, whether it is SURVIVE, DIE or GROW these businesses need new blood, fresh thinking, temporary or permanent management in the form of business consulting or restructuring. We have had situations where we even recommended the hiring of a Psychologist to interact with existing family members and to vet new hires as to their compatibility with the existing family group, including but not limited to personality inventory, experience, IQ, negotiating skills et al. The biggest single issue is usually the death of the Founder/Husband/Father leaving the business in disarray due largely to the lack of planning and a Post Death Will making definitive appointments of the family members, who heads the company, the decision makers the company direction, consequently, leaving the company in shambles. This reminds me of an existing prospect, who I just visited and the husband died leaving his wife in-charge; however, his two kids thought they should be in-charge and their Mother literally move to Florida. While that sounds like a loving family on the surface the fact is the two kids want to change the direction of the business and the Mother does not and the suggested move to Florida is intentional so the kids can do their own thing. This will not happen since the Mother is on all the guarantee paper and would lose everything if the business fails. Our recommendation was for us to actually be involved in all aspects of the business with a permanent business manager so the son can practice his skill, which is working on motors and the daughter her skill, which is office work and the Mother can remove herself from their daily family arguments, which have been counter-productive and actually destroying the company’s core business. We even have a certified Succession specialist on our synergy staff, who is trained Solution Driven expert in such matters; along with an attorney, who can handle the many legal issues that arise when the family does not agree on a specific plan, sometimes this includes one family member buying-out the other(s) or just selling the company, which we have recommended when there is just unrepairable dissention. My advice to any family member, who identifies with the above is to call us or any professional experienced in such matters for immediate consultation before it is too late and the business “self-destructs!” Blog 4. The Fallacy of Business Plan TemplatesTHE FALLACY OF BUSSINESS PLAN TEMPLATES I am so frustrated with those websites that promote purchasing a Business Plan Template with multiple versions of the same form that are totally GENERIC and have limited applications. There is no such thing as a GENERIC business plan or even a GENERIC Resume as the audience for any business plan varies as to the intent or message the both are intended to reach. In addition to variable audiences, there is also the issue of the quality of the PRESENTATION of the business plan; including but not limited to, the so-called ELEVATOR PITCH, TWO MINUTE DRILL and of course a full PRESENTATION with such aids as Power Point, Slides and Videos. Here are some of examples of which I speak: THE PROOF OF CONCEPT PLAN You are a new aspiring entrepreneur with a great idea (aren’t they all) and all you want is a confirmation of PROOF OF CONCEPT so you go to a local business incubator and make your ELAVATOR PITCH to get a result evaluation; at this point you probably do not have a completed business plan but an outline for the presentation itself with the thought that you will build a business plan around the evaluation of your presentation (good idea) but what usually happens is that you are being evaluated based on your presentation skills rather than you project. The result of this approach is your idea may be the best thing since sliced bread but you presentation skills suck and your idea dies a natural death. What are your options at this point? A. Go get a job B. Hire a personal coach to teach you how to give a presentation (good idea) C. Hire someone else to give the presentation (not a bad idea) D. Hire a professional business plan preparer (Like us), who can also COACH YOU to be the presenter THE PLANS Ok, you made it through the ELEVATOR PITCH and believe you may have something but like most aspiring Entrepreneurs, you will either need to BOOT STRAP your project or go to FAMILY, FRIENDS AND THE LOCAL BANKER all of whom will want to see a business plan. Should the plan be generic from one of the many template sites or specially designed for your intended audience? THE ANSWER IS YES! You need a Plan Specific to the target audience; for example: FAMILY AND FRIENDS PLAN: This group is usually your first line of funding and deserves the same professional Business Plan as would any lender/Investor and should focus on the Executive Summary speaking to your personal dream, which should resonate with your relatives and close friends. FAMILY BANKER PLAN: He or She will want to see a full scale business plan with a complete financial section focused on DEBT SERVICE and COLLATERAL PLEDGE to support the loan and may even want a GUARANTOR. OUTSIDE DIRECT INVESTOR PLAN: He or She will also want a complete business plan but focused on ROI, P & L and a planned repayment VENTURE CAPITAL PLAN; In addition to the above business plan requirements; these individuals will be sizing up your company’s valuation and there % of ownership and will focus on your financial projections and the potential of the venture itself. VENDOR SUPPORT PLAN: This group will focus on your individual credit rating and the potential of your venture as a customer and some indictor of your ability to pay on credit when due. THE IPO PLAN: This is the good old “Dog and Pony” show presented to a group of stock brokers and investment bankers/investors interested in taking your company public. This group absolutely requires a professionally written business plan, together with Power Point, slides, video and product or service demonstrations. WARNING-This group will not accept anything short of the best and again the entrepreneur needs a professional to, not only, put together the entire presentation, but also, in many cases, but not all, make the presentation on behalf of the entrepreneur. The above are just examples as to why a STANDARDIZED TEMPLATE approach is a waste of time and money. Please refer to my book titled “ENTREPRENEURIAL DECISION MAKING” featured on my website (www.mitchelletteandassociates.com) for a complete description of each component of a professionally written Business Plan, which you as the presumptive author can do yourself at a fraction of the cost of a plan written by a professional, as your first attempt and your initial “fishing expedition”. FYI: You doing the first edition of your own business plan will, not only, better equip you to better understand the depth of your venture, but also, help you with verbal presentations; then at the appropriate time when real money is on the table, either in the form of debt or equity, you do contract with a professional to do the business plan, since you may have created real interest and now must take measures to close whatever is being offered (re: metaphor “you hooked the fish on your own but you now need help in landing it.”) Blog 3. Start Your Own BusinessHELP! I WANT TO START MY OWN BUSINESS, WHAT SHOULD I DO?
Are you thinking of starting a business? if so you have a great deal of work to do, beginning with some self-assessment valuations; such as: Are you currently employed? Maybe so, but are you under-employed, do your talents or skills exceed the qualifications of your current position? Are you frustrated with the culture and treatment of your present employer, no real bonuses or “that-a-boy/girl?” Do you feel you are not receiving the right compensation you deserve? Or did you just get fired or lais-off? If so, you are a part of a growing culture of frustrated mid-level employees, who are probably over 50 who want something more out of their 50 hour a week endeavors and not just more money, but more responsibility and more challenges with opportunities to measure their efforts, not only, in terms of compensation, but also, promotions and recognition. If this frustration is the root of your dilemma then you need to read on and continue with the thoughts that will help you make prudent and relatively safe decisions before embarking on your journey for independence and hopefully financial gain. Luckily, you happened to receive this Blog that may well clarify many of the issues you need to resolve before you take any step toward becoming an entrepreneur and starting your own business. So, let’s start with some basic questions, that only you can answer and be brutally honest with yourself in the process. Did you explore or discuss your frustrations with your boss, spouse, personal banker and maybe close friends? If so, what were the results and don’t try to memorize their responses, write them down for future review; such as: Creating a checklist (examples below): TALK TO SPOUSE? You spouse may applaud your drive and ambition and support you 180% or your spouse may be very upset with your thoughts of starting your own new business. Let’s face it, if it you do not have the support of your spouse then you may very well be on a marital collision course. The other element to consider, if you do not have the support of your spouse, is eventually he or she will be required to co-sign different documents for bank or personal loans or inclusion as an officer in your new start up business and again, if you do not have their support your “Goose is cooked” and I mean “overdone” as any resistance to signing is a “Red flag” to any lender or investor that you can’ go it alone or your venture does not appear to have much promise. TALK TO BANKER, PERSONAL FRIENDS & POSSIBLE INVESTORS? It is vitally important for you to know the possible sources of your capital including how much money you are willing to invest (skin-in-the-game) and the cash reserves your contacts may contribute. TALK TO CONFIDANTS ABOUT THE IDEA OR VENTURE? Learn as much as you can about your intended business, explore other business options; such as, purchasing an existing business or a franchise? Then when you realize you are probably over-your head in this endeavor, do yourself and your spouse the biggest favor you can! Hire a professional business consultant, who has been there and done that! One with a proven record of success, doing it himself. A Battlefield tested entrepreneur, not a theorist and pay that consultant to do a comprehensive BUSINESS PLAN that will provide many answers to all the issues involved in your quest to start your own business. In addition to the above, any legitimate investor and/or lender will want to see a professionally written business plan and listen to the presentation, which better be professional and delivered with confidence and honest facts, including but not limited to the Pros & Cons of the venture as well as the a sound “risk/Reward” analysis. We here at MITCHELLETE & ASSOCIATES do this every day and as a matter of fact the founder has done this for himself as an entrepreneur and an academic teaching and publishing books on the subject. If we don’t think your fundamentals are sound; we will tell you upfront. If we see a light at the end of the tunnel but to make it brighter, we will tell you that, too. Most importantly we will be quick, concise and honest in our assessment from the very beginning of our discussion. We have even lost potential clients because we were too honest and direct with them and they did not hear what they were hoping to hear but in retrospect they were happy we saved them time and money and maybe their personal relationship. You have no idea at this point, what is in-store for you, if you unwisely commit to starting or buying a business and it fails. The failure can and most probably will haunt you personally and financially for years if not a lifetime. So, pick up the phone and call us at 612 715 9217! It may well be the “First day of the rest of your business life” Blog 2. Venture and Risk Assessment
Ok, you and your spouse have discussed the key issues of making the leap from unemployment, for whatever the reason, to starting a new business; be it a ground floor vision or a franchise purchase. Now you are about to enter a confusing and often complicated world of “Due-Diligence,” exploring start up ideas or buying into an existing business and not necessarily a franchise; perhaps a partnership in an existing business? You are there, feeling pretty good about taking CONTROL of your life, determining your own DESTINY. Now what? HELP: Please take my advice and seek experienced counsel at this stage or your information gathering will over-whelm you to the point you may be making wrong decisions with information much like the metaphor “Can’t see the forest through the trees.” STOP! Start interviewing Business Consultants to help you through the “Forest” and take your time in the selection process and hire the right Consultant or you will soon double your problems not cure them; nevertheless, a good place to start is selecting a firm or individual with plenty of BATTLEFIELD EXPERIENCE. Question: Who would you rather take orders from in a real battle to engage the enemy; a West Point graduate, who never experienced a BATTLE or a Sargent, who has the BATTLE SCARS from real COMBAT that proves is survival skills and understanding of the situation? Answer: The Sargent! Analogy: The Sargent has been there and can “Walk the Walk and Talk the Talk” the West Point graduate is a novice with no actual combat experience and I will take experience over theory any day of the week. In keeping with the “Battlefield” example, I am also amazed at how many entrepreneurs start a business before they are ready or qualified, either by training or self- evaluation like taking a personality inventory test to see if they have the RIGHT STUFF. My advice to those aspiring entrepreneurs is to take a good long hard look at themselves, even taking the TEST in Chapter two of my book “Entrepreneurial Decision Making” available on our website (www.mitchelletteandassociates.com) first to make the above assessment; then start a CHECK LIST consisting of:
The more inner-perspective you can be about yourself, the better prepared you will be. The time and money you spend to prevent a sometimes irrevocable mistake the better the chance of success or you may face years of HELL trying to extricate yourself from the horror of going into a business that fails without proper preparation including but not limited to:
Note: There are few humankind-mind blowing disasters as watching the Sheriff armed with a “Writ of Replevin” march up to your business and home to remove all assets of each and every kind, stripping you of any honor or possessions you ever had or have and may have! Think about the following before you JUMP
I have a client, who is practicing what I have been recommending in the above title as she wants to open up an eyelash treatment salon and here are her options:
We still have not decided which option would be the best for her and are searching for the right choice through extensive due-diligence. Good Luck!! WELCOME TO THE FIRST OF MY MONTHLY BLOGS COVERING ENTREPRENEURSHIP AND ALL THE RELEVANT ISSUES APPLICABLE THERETO.
EACH WEEK WE WILL DISCUSS A DIFFERENT HURDLE, COVER EACH BASE AND MOVE FORWARD! Blog 1. The “AGE OF WISDOM (over 50)” Hey!
I have been in the business consulting practice, either as an entrepreneur, executive in traditional banking firms and/or in my own consulting practice for over 40 years and without doubt one of the most pressing issues of our time is how long we now live, how actually healthy and vibrant we are at ages 50-60-70 and beyond and not to be under-estimated, the strength of our mental capacity and battlefield life experiences It is basically a suicide mission to engage in job hunting at the above ages, especially when the corporate gate-keepers are just old enough to be your son or grandson and they in-turn think of you as either their Father or Grandfather; in either case it is a no-win situation. So maybe it is time to start thinking about starting and launching your business; after-all you have at least 30 years of experience and plenty of contacts for networking and self-promoting your new business. Get on the bandwagon, now! Talk to your spouse and begin the journey but first arm yourself with a PLAYBOOK strategy by actually purchasing my PLAYBOOK on the subject (Entrepreneurial Decision Making). There you will learn whether you are even ready for such an undertaking and qualified for the job, just like in the corporate world, think this is silly, think again as you are about to use all your savings, pledge all your personal possessions including your home and owe your relatives, friends and credit cards a bundle, so please do not dismiss the decision making as a passive thought. Once you hurdle the first obstacle and the initial stages of contemplation and reached your decision to become an entrepreneur, you will be faced with implementation ranging from capital to proof of concept and launch, all of which are big hurdles to clear as you will continue to resolve such other issues as capital, legal structure of the organization initial incorporators, marketing strategies. |
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