August 28, 2017

How a Business Owner can Growth Net Worth fast! Compound Interest: The Power Behind It

One of my all-time favorite quotes is the one about compound interest that’s attributed to Albert Einstien. “Compound interest is the eighth wonder of the world. He who understands it earns it. He who doesn’t pays it.” You will probably see that quote a million more times on my blog because it is one of the truest concepts ever! Sadly too many fail to understand and grasp it. Here’s an example to help you recognize the importance of compound interest if you don’t. The Choice If I offered you $5000.00 of cold hard cash or a magic penny that doubles every day for 31 days, which would you choose? Most people will choose the $5,000 because we simply want that instant gratification. Here’s the thing a penny doubled every day for 31 days is just over $10 MILLION! HOLY COW BATMAN!!  That’s a lot of money.  On day 10 your penny is only worth a measly $5.12. I get it! That doesn’t seem like much when you could have taken the $5000 and ran just nine days earlier. However, if you hold out until day 20 on the penny, then you have just over $5241.00. You would finally come out better […]
August 24, 2017
When Should I Start Contributing to Retirement?

When Should I Start Contributing to Retirement?

As a business owner, I know how easy it can be to get caught up in the hustle and bustle of running a company. You can get so busy that you even forget about saving for your retirement. That’s never a good idea though. Recently someone contacted me on Twitter asking this, “Justin, I’m a new business owner, and I have some extra funds? Should I start contributing to my retirement now?” That’s great that this new business owner is already starting to think about retirement! However, there is a process. Check out this video to see my answer. There are three main points you need to consider as a business owner before you ever start contributing to a retirement account. 1. Have a business emergency fund. That means you have at least one month’s worth of company expenses set back. If you run at $50k a month, you’d have $50k a month set aside in your checking balance. Hopefully your accounts receivable are operating at greater than that. So basically you would have your balance running at somewhere between $50k to $80k, possibly even $100k. So you need to have roughly one month of expenses in excess of your […]
August 19, 2017
Misconceptions About Small Business

Misconceptions About Small Business Owners

According to the Small Business administration, over 50% of all employees are employed by small businesses. Since 1990, large companies have eliminated 4 million jobs while small businesses have generated 8 million new jobs. If you collected all the small business employees and created a new country with them, they’d be the 17th most populated country in the world. Small businesses are the haven for innovation. They are twice as likely to produce innovative ideas with small business employees generating 13 times more patents per employee than large companies. Small businesses and their owners are an essential component of the U.S. economy. Despite all the good that small business owners provide, there are many misconceptions about small business owners. Here are three misconceptions I hear all too often and their realities. 1. Entrepreneurs are free to schedule their hours however they wish. It never ceases to amaze me how many astronomers do their stargazing during the day because they sleep better at night. Yes, there is some variability around the hours an entrepreneur keeps, but ultimately, their vocation sets the hours. How much control does an entrepreneur have? Well, perhaps they choose to get up and work from 5 am until 5 pm instead of working from 7 am to 7 pm. The first option means less […]
August 17, 2017

How to Increase the Value of Your Business

Tuesday we looked at the danger of trying to drive the value of your business up for the purpose of selling it. Today I’m going to tell you how to increase the value of your business long before you pass the torch on. Have you ever wondered what makes one company more valuable than another despite the fact that they are in the same industry? Well, I’m going to give you several points you can work toward achieving. However, the most vital component is honestly, planning years in advance. So what steps should you take to begin your exit? Here are a few. When I work with business owners, there is nothing that excites me more than to show them how the value of the company directly affects their net worth. According to the Exit Planning Institute, 80 to 90% of a business owner’s net worth is tied up in their business. Many times business owners, especially in the beginning stages, focus only on driving the revenue up. While profits are what one the most important factors when it comes to selling your business, it’s not the only one. Focusing solely on making income may line your pockets while you […]