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2013

My dad had what he thought was a foolproof succession plan for his carpet business. We were all fairly young when he passed away (I was only 20), so his plan at that time took into account all of my siblings’ ages. In his will, my father divided the business into five shares. My

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three siblings and I were to each get 20 percent of the business apiece, and my dad’s general manager of the business would get the final 20 percent.

 

The plan was that the manager would run the business, if needed (and it was), until one or all of us was ready to do so. However in the end, it was an unsustainable plan. I was the most likely to take over the business, but I was a good seven or eight years away from being ready to do so. Within two years, the manager was quite unhappy: Here she was, running this business, and 80 percent of the profits were going to my siblings and me. In the end, we sold our 4/5 share of the business to her.

 

This situation taught me that when thinking about retirement or passing your business on to someone else, it is important to put a lot of thought and planning into the process.

 

Like so many Americans, it turns out that a lot of small business owners are in fact not prepared for retirement. But the good news is that, to paraphrase the Wizard in The Wizard of Oz, ‘they got one thing most folks haven’t got – a business.’ And it is that business I want to focus on today.

 

Click here to read more articles from small business expert Steve Strauss

 

Here are a few tips to help you maximize your business’ value for both you (as a retirement asset) and your loved ones (as an estate asset):

 

1. Get things in order: Whether you plan on passing your business on to your family or selling it to plump up your retirement account, you will need to get an accurate valuation of it (see below). And to do that, you need to start by getting the business in tip-top shape:

 

  • Get the books in order: The fact is, entrepreneurs are great at many things, but accounting is not always one of them. If this describes you, it would be wise to hire a CPA to get the books in order, including a list of assets, a profit and loss statement, a list of accounts, etc.
  • Spruce the place up: Just as you would get your home ready before you put it on the market, you need to get your business ready as well. Clean out the back storeroom, paint if needed.

 

2. Get a valuation: You may have an idea of what your business is worth, but more than likely, it is more a notion than a legitimate number.


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It is important to have a professional valuation conducted by a business broker or appraiser. Most businesses are appraised by looking at the assets, subtracting the debts, and giving a multiplier to the profits (it depends on the type of business and industry whether your multiplier is 2x profits, or, say, 6x profits.) But a professional will know. They will review your financials, look at the business, analyze profits, know the multiplier, and give you a value for the business.

 

3. See an estate-planning lawyer and/or accountant: When looking to sell or pass on your business, it is neither the time nor the place for playing lawyer or accountant. Again, this calls for a professional, maybe two.

 

If you are going to sell your business, your estate-planning lawyer or accountant should have some valuable strategies in place to help you, for instance, mitigate taxes. He or she will also likely give recommendations on how to best invest this money into various retirement vehicles.

 

If you are going to pass it on to a spouse or your children, knowing what it is really worth will be invaluable to you and your professionals, as you look to divvy up your estate. Your attorney may advise that you set up a trust and put the business in it, or sell it when the time comes, it all depends.

 

The most important thing to remember is that you have created a substantial asset in your business and the smartest retirement plan is to maximize its value for you and your loved ones.

 

How have you started planning for retirement? Share your story below.

 

About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss

http://www.smallbusinessonlinecommunity.bankofamerica.com/people/Steve%20Strauss/content

You can read more articles from Steve Strauss by clicking here

 

Empathy_Body.jpgby Erin McDermott.

 

Marilyn Schlossbach faced the worst of Hurricane Sandy and then some. When the Category 4 storm walloped the New Jersey shore last October, it caused tremendous damage to her budding restaurant empire, destroying three locations in Asbury Park and imperiling the livelihood of some 150 employees. Wind, water, and waves knocked out her home above one location, the Labrador Lounge, in badly damaged Normandy Beach for five months. And there was another huge life event to manage: Schlossbach also had four-month-old twin daughters.

 

Fighting red tape and displacement, salvage, reconstruction, and exhaustion, Schlossbach’s restaurants reopened this summer. When others might have given up, she’s back up and running. “We’ve been though a really stressful year,” Schlossbach adds. “But in the end, I think we’ll be stronger for it.”

 

And these days, when members of her storm-stressed crews start getting frustrated in their bustling kitchens and dining rooms, Schlossbach tries her own approach to calm them.

 

“I say to my staff  ‘Go to your sad place, not your angry place’ in times of stress or turmoil. Because when you see an angry person coming at you, you run away. When a sad person comes at you, you embrace them—and you want to help them.”

 

In the rush of an all-consuming business, it’s easy to lose a connection with those who are in the trenches making the dream of your business happen. But the ability to put yourself in your employees’ shoes is crucial to your success. It’s also key to knowing what motivates staffers to perform better and what could win you their undying loyalty.

 

Empathy_PQ.jpgScience may explain some of what employers face. In a study that recently made headlines, researchers in Canada pinpointed how an individual’s sense of power alters the way the brain operates. In experiments, those who were made to feel powerless had portions of their brains linked to empathy light up during scan. At the same time, test subjects who were made to feel powerful had a very low signal coming from that region.

 

Syd Hoffman says she gave her full-time employees a paid half-day off each week after they reached five years at her private elementary-school startup in Arizona. A working mom and high-school math teacher herself, she empathized with her staffers’ busy lives, which created a happier atmosphere.

“It was the best thing I ever did,” Hoffman says. “People scheduled all their errands, appointments and repairs for the morning or afternoon. They worked really hard the other 4.5 days, smiled, and were very loyal to the company.”

For any entrepreneur, empathy is an imperative when it comes to customers, too. In Dev Patnaik’s 2009 bestseller Wired to Care, the business strategist suggests the payoff can be significant when a company can fully understand what problems its clients have and hear the feedback needed to get to a marketable solution. He cites the example of Harley-Davidson, which has gone so far as to hire customers as full-time employees—just to tap into that knowledge and deep emotional tie. Back at the Jersey shore, Schlossbach’s restaurants made it through a busy summer, with some patched-up lumber salvaged from structures destroyed by Sandy.

Every entrepreneur wants to have a business primed for growth. However, in business, as in life, timing is everything. So the question is: how do you know when the time is right?

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Here are eight situations when you should consider taking your business to the next level:

 

1. You topped out. For example, if you have one store and three staff members, there is a limit on how much you can do, how many customers you can serve, and thus, on how much revenue you can make.


Click here to read more articles from small business expert Steve Strauss

If you are at this place in your business, it is time to think about opening a second store, hiring additional staff and/or purchasing more inventory. Obtaining a bank loan may be just what you need to break out of stagnation mode and kick into high gear.

 

2. It has been your plan all along. A good business starts off a strong business plan, which should be revised, updated and followed. If you have a plan that projected a certain amount of growth and you’ve hit it, then it makes sense to take the next step and evolve it for growth. After all, it got you this far and has been helpful, right?

 

If the plan says it’s time to grow, it’s time to grow.

 

3. Your team agrees. While entrepreneurs like to think that they can do it all themselves, unfortunately they can’t. The best small business owners have a good team around them. So check in with yours – do they think it makes sense for you to grow? What does your banker think? Your lawyer? What about your staff? If the consensus is that taking things up a notch makes sense, then it is probably the right move.

 

4. The numbers dictate it to be so. One of the best pieces of advice I ever received in business is, “Let the numbers do the talking.” What is great about this concept is that it takes emotion and subjectivity out of the equation.

 

What are your numbers saying? Do they support a plan of action for growing your business? The numbers don’t lie. If they say yes, then go for it.

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5. The stars have aligned just so. There are magic moments in business when everything lines up just so, like a jigsaw puzzle when the last piece fits in perfectly. It could be that you got some new customers, a lot of publicity, or a big break . . . whatever the reason, when the stars align to give you a boost, give thanks and go for it.

 

6. Externalities require it. By the same token, sometimes outside forces create opportunities that you did not expect or anticipate and would be foolish to ignore.

 

Let’s say, for example, you have a business in the health care field, which an additional 30 million people will soon be a part of. Money is being poured into the industry and it would be imprudent not to look to take advantage of this externality.

 

7. There’s an opening in the market. Maybe your biggest competitor just went out of business. Maybe a new buyer is ready to buy more. When the market demands extra (or new/ different) goods or services, you should be the provider of them.

 

8. The Warren Buffet Rule applies. The “Oracle of Omaha,” the world’s best investor, Warren Buffet has a rule that fits here: “Buy when everyone else is selling and sell when everyone else is buying.” Translated into the world of entrepreneurship, this means that the time to grow may not always be so obvious to everyone else. You are the only one who knows your business best. The time to strike just may be when it is least expected, when people don’t see it coming, and thus, when you have the chance to capture greater market share quickly, and with less competition.

 

We all want growth, but if you hold on to your horses and strike when the time is right, you reduce the risk of failure and increase your chances of success.

 

Have you recently taken the next steps to grow your business? Share your story below.


About Steve Strauss

 

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss

http://www.smallbusinessonlinecommunity.bankofamerica.com/people/Steve%20Strauss/content

You can read more articles from Steve Strauss by clicking here

Married_Body.jpgby Erin McDermott.

 

You’re chasing leads, finding backers, grooming clients, making payroll. There’s the marketing plan, the next marketing plan, social media strategy, IT guy, insurance guy, delivery guy. You’re the first one in, and the first last one out the door—it’s your small business, and it’s your life.

 

So where do the people trying to share their life with you fit in?

 

Entrepreneurs choose their path knowing it’s not going to be easy. It’s a passion, a desire for independence, a way to help others solve problems, or create something to make people happy. It can also define the “all” in all-consuming, which can lead to resentment from significant others and anguish about your personal life, or lack thereof in some cases.

 

“Most people are used to having a boss tell them what to do and when to work,” says Elizabeth Lombardo, a Chicago psychologist and author of the bestselling book A Happy You: Your Ultimate Prescription for Happiness. “They think that because you have your own business you can do whatever you want and work whenever you want, which is so far from the truth.”

 

Steven Bazil laughs at that common misperception. His reinsurance law firm, Bazil McNulty, based in Exton, Pa., deals with clients all over the world, with hours and projects that are unpredictable. He’s up at 4 a.m. for urgent calls and emails from Europe, on stand-by on Sunday (which is a regular business day for his Middle East customers), and working during U.S. holidays that aren’t celebrated overseas. It all can make attendance at a weekend family picnic an iffy proposition, and a point of contention.

 

“When you start a business, it’s everything—your livelihood, your retirement, your reputation. We work all hours, at odd times, on Thanksgiving sometimes, but you have to balance that,” Bazil says. “Everyone likes that we make money, buy some nice things, travel to interesting places. The problem comes when it’s a holiday and there’s a million clients expecting things and, no, you can’t go to that barbecue with everybody. It’s not that you’re avoiding people. When you’re building something, you have to be able to bend over backward for clients.”

 

So three years ago, Bazil brought his wife, Gail, on board at the office, where she handles the firm’s marketing and now sees firsthand the demands of the business and the pressures he faces to deliver on tight deadlines.

 

“She sees my days when I have a conference call every 45 minutes, or the Friday afternoon when a huge document lands,” Steven says. “She sees it, and knows it’s ‘Sorry, I don’t think we’ll be going to the zoo this weekend after all.’”

 

Bazil says they now share in the ups and downs during their busy periods with their five dogs, and both are involved in local animal-rescue efforts. “We both laugh when friends ask what we did on vacation. Vacation? What are you talking about?” he laughs. “We don’t know what that is!”    

 

Married_PQ.jpgJenev Caddell is a New York-based psychologist, couples therapist, and relationship coach for entrepreneurs. She spent years working for big institutions before striking out to open her own practice, which is how she came to focus on the journey her clients are taking—and their unique challenges. 

 

Caddell says it’s paramount for partners to feel that they are a priority, too. But expressing feelings of neglect to a partner can be difficult if that entrepreneur is so stressed out from their other passion.

 

“If they are the one for you, your partner is and should be more important than your career,” Caddell says. “Partners can be understanding and have empathy and support what the person is trying to start up. But we’re in a culture where the brain trumps the heart, and a lot of people feel like they don’t have a place to say that they feel second-tier. It takes work on both parts—the entrepreneur can get so sucked in and lose sight of what’s important, and the partner can become complicit in that by not vocalizing how much they miss them or that it’s become a problem. The entrepreneur partner may not even catch that because they’re so focused on their work.”

Relationships can be fragile for anyone. How can an entrepreneur build one that will flourish? Here are some tips from the experts:

 

Be upfront

Make sure your partner knows your intentions. Why are you in the business? What are you hoping to achieve? What do you envision for the two of you?

Set limits for yourself Remember: Working excessive hours can lead to depression and reduce productivity, Lombardo says. Making a point of spending some time with your sweetie will be beneficial to your happiness and your business. Of course, if you’re in a phase that is demanding 100 percent of you, be clear about that, Caddell says. But also make sure your partner knows they are more important and the situation is a temporary one. A Caddell tip: Schedule times when you are not at the mercy of your business—even if it’s just for an hour, if that’s all you can handle—and shut your phone off.

Be present when with your partner

Repeat: Don’t check email while it is your time together. “People think, ‘They won’t notice. Let me just take a peek.’ But your partner notices,” Lombardo says. Better yet, shift your focus to them, Caddell adds. Know what’s important to your partner, ask about what’s happening in their life, and stay engaged with the daily ups and downs they’re experiencing.

Share the passion

Explain to your partner why the business is so important to you so he or she can understand that this is a calling, not an excuse to get away from them. “When it’s your own business, it’s you,” Lombardo says. “It’s like your business is your baby. If your baby was crying for you, you wouldn’t say, ‘It’s not time for me to be doing that. It’s time to be doing this.’ So the boundaries that we theoretically put up can be a challenge.”

Lombardo says it’s very helpful to keep a positive attitude about both relationships. “Look it at like, ‘Here are two amazing things in my life: I have this business that I’m crazy about—and that’s why I’m doing it—and I’m so excited about having someone who can share my life with me,’” she says. “People talk about the glass half-full or half-empty and the truth is it’s both. It’s your choice of how you view it. If you can find the positive, it affects everything you do, in terms of creativity and productivity, and it attracts people to you and your business, too.”

Are you using social media? You’re not? What’s wrong with you? Don’t you know that social media is the future? Come-on, get with the times!

 

If that conversation sounds familiar to you, you’re not alone. According to the latest Bank of America Small Business Owner Report, only 41% of small business owners surveyed said they are using social media as part of their marketing mix.

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Why is that? Why aren’t more small businesses using social media?

 

Well, many see social media as time-consuming and difficult to learn and measure. However, it is an incredibly powerful and affordable way to get the word out about your business.

 

Click here to read more articles from small business expert Steve Strauss

 

 

Another problem is that the term “social media” can be overwhelming, with many small businesses unsure of where to start. The fact is not all social media platforms are created equal. The big four – Twitter, Facebook, LinkedIn, and, yes, YouTube – are actually all very different. Indeed, depending upon the type of business you have and the goals of your social media campaign, one of these platforms is probably a far better use of your time and efforts than the others.

 

Let’s drill down and explain that in a bit more detail:

 

Facebook: The good news about Facebook is that everyone uses Facebook. The bad news is that everyone uses Facebook. Although Facebook is an easy way to reach your consumers, it can be difficult to attain visibility as your competitors are using it as well. So you should only be there if it will help grow your business.

 

So, what type of business benefits does Facebook offer? Generally speaking, studies show that the businesses that do best with a Facebook Fan page are retail establishments. Why? It’s because Facebook makes it easy for such businesses to interact and connect with their customers, friends, and fans. For example, on the site, you can:

 

  • Post pictures and videos of your business, or of your customers or products, etc. Facebook fans love to watch videos and see funny photos.
  • Have a contest: Facebook is the best for this sort of promotion, and such promotions usually work best for retail companies. After all, it would be hard to see a law firm having an effective contest on Facebook, but it would be a winner for a restaurant.

 

Pull Quote.jpgTwitter: By the same token, Twitter, while not nearly as big as Facebook in terms of popularity, lends itself to being a very effective tool for professionals. On Twitter, it is easy to establish yourself as a “thought leader,” by tweeting valuable content that builds your brand and engaging in smart conversations with people in your industry. Twitter allows professionals to create a desired and respected persona.

 

Twitter, as opposed to Facebook, can be useful for all types of businesses.

 

Different platform, different purpose, different outcome.

 

LinkedIn: LinkedIn, as you well know, is a very different animal than Facebook and Twitter. This site is great for networking, finding the right person to do business with and making new connections.

 

I have a pal who owns a business in California. LinkedIn is his site of choice. Whenever he is ready for new partners for a deal, or a new big customer for his custom product, he finds the right person on LinkedIn and gets an introduction. That is how he gets all of his business.

 

YouTube: Though YouTube is not always thought of as a social media site like Twitter, LinkedIn, and Facebook, it is one of the most popular sites on the planet and people share the content they find there to an extraordinarily high degree.

 

YouTube is great for those folks whose message can be shared visually without being a professional videographer. Tim Carter of AskABuilder.com has a very popular YouTube channel where he shares tips on home improvement. If you can figure out a way to share your story via video, it might do very well for you too.

 

The secret to it all then is to find the right social media site for your business.

 

Which social media platforms do you use to grow your business? Share your story below.

 

About Steve Strauss

 

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss

http://www.smallbusinessonlinecommunity.bankofamerica.com/people/Steve%20Strauss/content

You can read more articles from Steve Strauss by clicking here

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