If you’re considering retirement, deciding whether or not you’ll need to keep working can be a difficult and confusing question. There are a number of things to consider, but the list below should help you to make an informed decision.
1. Consider your actual living expenses after retirement
Once you know how much you’ll need to keep your household going from month to month you can examine how much money you’ll receive in Social Securityand how much you’ll be able to draw from any investment accounts or IRAs you may have. Be sure to make your calculations based on the post-tax dollar amount to avoid a potentially serious misstep.
You’ll need to be aware that working after retirement could actually push you into a higher tax bracket, which could cause you to fall short of your monthly expenses. Determine what your tax liability will be, including your Social Security and any other income you may have, then determine how continuing to work will impact that liability.
2. Understand how working will impact your Social Security
There are a couple of factors to be taken into account when determining whether or not working after retirement is going to impact your Social Security. It will be impacted by the age at which you retire and your income from work. If you decided to wait until you had reached fill retirement age you can earn any amount without reducing your benefits. On the other hand if you retired anytime between the age of 62 and your full retirement age, you can be penalized financially for earning more than around $15,000.
By researching the full retirement age for yourself you can discover the cap on your income. If you exceed that cap for a full year your Social Security payments will be reduced by $1 for every $2 you go over, and if it will be less than a year you will lose $1 for every $3, but the income limit is significantly higher. Use government resources to be sure that you are being given the most accurate information.
3. Determine what the best health care option will be
Once you’ve reached age 65 you will automatically qualify for Medicare. If you’re still working you may also be paying for some private insurance through your employer, and it will be in the best interest of that insurance company to get you moved over to Medicare as soon as possible.
For many people this is a great option, but in some cases a private insurance plan will cover treatments and procedures that Medicare won’t. It is important to realize that you can keep both types of coverage, but bear in mind that you will be paying to health care premiums. Speaking with your medical provider and a representative from both of these insurers can help you to sort out the best option for your health and finances.
4. Research how working in retirement will impact your pension
If you have a pension or a 401K plan, you’ll want to speak with the administrator of that plan to understand what effect working in retirement will have on it. While continuing to work can reduce the amount of time you’ll spend draining these funds and even increase them with added contributions, some pension plans max out at 30 years and continuing to work could lead it to stagnate or even to be reduced. On the other hand, some pensions are based on your most recent salary with the company, and if you decide to drop down to part time with the same employer to supplement your income, a large portion of your pension could disappear.
5. Decide whether or not you’ll spend your golden years doing something you love
One of the best advantages of working in retirement is the fact that money can be a secondary goal. If you’ve planned and invested well, and if you live within your fixed means, you can choose to do something that you find interested, fulfilling, or fun, and worry less about how much it will contribute to your income.
Some people find ways to work from home, some work as consultants in their former industry, working to shape it for the better. Others endeavor to write their history or give back to their community. The most important thing to remember is that you now have the luxury of choosing how to spend your time, so why not spend it doing something that makes you happy?
Arlene Chandler works as a freelance writer for Suncorp, a company that provides income protection insurance for Australians.
It is easy to presume that someone who has been as successful as Dick Bolles is a highly disciplined worker who achieves more in the rest of a day than most of us! When asked how he sticks with one task to get things done Dick gives a most enlightening and endearing response.
By Jenni Proctor
Do you want to start an online business?
Are you planning to start an online business but do not know where to start? Are you currently running an offline business and would like to utilize the power of the internet to grow your profit? Are you an online business owner who’s close to having to give up your dreams because your marketing plans seem to be not working well? If you answered yes to one of these questions, then this article series is for you. In this series I have shared with you the essential steps to create a successful online business. I am going to go into details about each of these steps to give you much information that you will need to succeed in your online business.
I cannot stress enough how important it is to have a well-organized business plan before starting any business. Your business plan will serve as your reference in all the actions that you are going to implement in your business. To some, creating a good business plan seems overwhelming, but let’s be realistic and recognize this is just the first task. There are many more steps that you need to take if you want your business to succeed and the next steps can be more challenging, but don’t be disheartened. When done correctly a good business plan is the key to your online business growth. A business plan helps keeping you organized and focused on the actions that you will take in running your online business.
A good business plan should have realistic financial projections or forecasts. Do not set figures which are unrealistic and impossible to achieve. Your business plan must be clear and straight to the point and should be action-oriented. It must present a clear understanding of the business processes of your company.
Before you start your online business it is vital to know how your industry is going so make sure that you do market research before anything else. Gather as much information as possible about your target customers, your type of product or service and your industry trends. All of this information will help you implement the perfect marketing strategy for your online business. You can get information from business journals, government publications and over the internet. If you want more thorough research, you can also utilize customer surveys.
Studying and monitoring competition is one of the most important steps in creating a successful online business. Monitoring your competition will help you identify your competitor’s weak points and create a good business campaign, emphasizing strengths of your business where you have identified their weaknesses. This will also help you get a glimpse of your competitor’s operating systems and so you can endeavor to make your service or product a better one than your competition.
The process of creating a business plan that will work, doing market research and using strategies to monitor your competition can be confusing and complex. Make sure that you’re maximizing your opportunities by seeking the right advice and getting genuine help.
If you are thinking about starting a new business, it is best that you do it before you officially retire. There is a couple of benefits of doing so which I shall cover below.
When you hold down a job, it is easier to secure financing for your new business. Whether is it a business loan or going to direct lenders for payday loans, you will get approval if you supply the documentations needed when you have a job. When you are retired, it is much tougher to secure any kind of financing, especially from banks.
When you are still active in the job market, you will meet more people relative to when you are officially retired. You can take this chance to do some networking for your new business. Talk to people and see who are potential sales leads or business partners. It is difficult to get a meeting when you are not on a official business so take the opportunity when you still have a job to secure as many meetings as you can.
A new business carries a lot of uncertainties. Certain assumption you hold might not be true, which can derail your business. As a result, if you new business doesn't generate cash straight away, and you are burning away your hard earned savings, it can pretty stressful if you don't have your job as another income source. Doing a new business is already a stressful event and you want to avoid adding to it by having cash flow issues as well.
The downside of holding down a job when starting a new business is the additional hours you need to put it. However, I think the benefits outweighs the cost of doing so.
There are many hurdles that someone interested in business needs to overcome. Here are some typical hurdles that we see that you need to think about before exploring business ownership.
Perhaps the most common issue for not exploring or going into business for one’s self is an individual’s budget. And this is not only for franchise businesses, but all businesses across the board. Two things are in play here: (1) available or liquid capital that a person may have to invest, including cash, stocks, bonds and/or retirement savings. Typically, FranNet recommends that someone interested in franchise ownership have about 25-30% of the “all-in” costs to buy a franchise in liquid capital. The “all-in” costs include all start-up fees to get the business going — things like the franchise fee, new equipment, build-out, special vehicles, insurance, and working capital, for instance. So a business with an all-in cost of $100,000, an individual would need about $25,000-30,000 to get their business open.
The other piece of the puzzle in play here is (2) the relatively tight credit market. Lending is slowly coming back across the country, but lenders are still a little tight fisted. What someone doesn’t have available in liquid capital needs to be borrowed. The balance of the 70-75% of the “all-in” investment can be acquired through a lender, which are more likely to lend money to a new franchisee than a typical start-up business.
2.) Family Support
This is a hurdle that tends to be ignored until it’s too late. We hear horror stories all the time of someone interested in buying into a franchise and they run home to tell their spouse about their interest. The spouse doesn’t realize what’s involved and usually has one of two reactions: (1) “Sure honey, that’s great,” dismissing it as passive interest, or dismissing it as “that’ll never happen.” Or (2) the spouse will respond harshly, “Absolutely not. It’s too expensive/too much time/too much effort/not a good idea (enter reason of choice).”
Either way, the spouse may be ill-informed of the opportunities and the challenges involved with buying into a franchise. At FranNet, we strongly advise the spouse is included at all points throughout the exploration and recommend that both spouses attend all meetings concerning the potential new business. Someone wouldn’t buy a house without their spouse being heavily involved – and they shouldn’t buy a business without their spouse/family heavily involved in the process.
3.) Seemingly unlimited options
There are a little over 3,100 different franchise concepts in just about every industry imaginable. So where you do start? Google, of course! And you’ll become quickly overwhelmed when Google returns about 8 billion results when you search, “franchise business opportunities.” The better option is to do a true evaluation of your skill set, goals, strengths, weaknesses and budget. This will better help you define potential franchise options. FranNet will walk you through an extensive proprietary evaluation — a personal franchise assessment — of those criteria, plus many others. The assessment looks at a person from many angles, including focusing on their behavior profile, risk tolerance and financial background. These attributes are combined with what the company has learned in the marketplace over the 25 years it’s been in business to find an ideal business in which the client may succeed.
4.) Lack of Focus
This is really tied to #3 above. A lack of focus comes from the incredible range of franchising options available. Without professional guidance on which concepts make the most business and financial sense, someone could spend a lot of time spinning their wheels researching concepts that are not great fits with their skill set or goals. This lack of focus tends to cause potential business owners to become fatigued by the process of finding a business.
We like to say, “If you’re not nervous, you haven’t done enough research.” As with any decision of this magnitude, there should be some sense of anxiety simply due to the magnitude of the decision you’re making. Anyone who doesn’t feel some nervousness probably hasn’t dug deeply enough to uncover all the potential potholes and all the potential questions. An educated buyer is the best buyer, and FranNet provides all the necessary education to arm you with as much information as possible. But at the end of the day, you have to make the call on which franchise system works best for you. All of the information in the world isn’t going to make the decision for you. Follow your gut instinct – it’s generally the best barometer.
About the author: Jania Bailey is President and COO of FranNet (www.frannet.com) and author of “Thriving – The Journey to Success in the Business World.”
It’s never easy to start a small business, but now may just be the perfect time. The economy is still in recession and hiring has slowed to a crawl. So if you are underemployed or willing to take a leap with a bit of an emergency fund behind you, you’ve got nothing to lose. After all, those pension plans we all thought were guaranteed after decades of working for the same company clearly aren’t worth what they once were. There’s no true reward for longevity in the corporate world. Better to go out and realize your dream! So you’ve got the idea, and the willingness to cultivate it. How do you start to develop a base of customers? The best, most inexpensive options for a small business are all through the internet. Here are five great ways you can promote your startup online right now.
If your startup is a commercial or retail business with a storefront, you’ve got to get up on the business listing sites. It takes quite a bit of effort and no small amount of money to show up at the top of those search engines when people type in keywords. But it is easy to get yourself up on all of the local and regional listing sites. That way if someone searches for a product or service by location, your startup will pop up as an option. Check out Yahoo Local, Windows Live Local, Yellow Pages and Google Local for a start.
Another great inexpensive option is the well-worded and timed press release. You don’t have to be a PR professional to get this right, but it is a good idea to have one review your work if you can. Basically, you want to announce your new venture in an exciting way that clearly shows your target audience and reveals a purpose that will be meaningful to people. It should be a page or less, and include a compelling quote by the senior members. Make sure all of your website and contact information are there as well. Then blast it out to all of the business owners you know, the bloggers and news sites within your niche and even the PR wires if you have access. As long as you catch people on the right day they will repost it, and you’ll receive the promotional visibility completely for free.
Next, get yourself up and running on the social media sites. Today’s internet is all about personal interaction. People get their news from each other these days, not from television networks or newspapers, and recommendations from tastemakers, friends and associates will go much further than any paid advertising. Upon the launch of your business you should have a website in place, but all should also be connected to Facebook, Twitter, LinkedIn and any of the other networks that make sense. You can promote everything you are up to through these various sites, and begin locating and contacting an expanding core audience.
Now that the network is set up, you’ve got to fill it with interesting content. That means developing a ‘news’ page on your website, or a fully functioning blog. Consider what it is that made you want to start your own business in the first place. What do you do better than anyone else? Or how does the knowledge you’ve accumulated over the years give value to people? If you can establish yourself as an expert and deliver that expertise in a blog on a daily basis you will gain a following. And that will translate into business for your new company.
Finally, consider network marketing opportunities. This doesn’t mean you have to set up an affiliate program or anything, and you’re probably not ready for that step. But it never hurts to connect with other small businesses for cross-promotion. Perhaps you can praise the company that made your store signs, and in return they give your business a shout out. Maybe you can provide a service to another company in return for inclusion in a newsletter or an advertisement. Keep your eyes open for opportunities, and you’ll find small business owners more than willing to work for the common good.
This year has brought some encouraging news for potential franchise owners hamstrung during the recession by a clenched-fist credit market.
Since the collapse of the housing market and near-collapse of the world economy in the fall of 2008, banks facing increased regulation and oversight of their lending practices have been loath to lend money, especially in the form of unsecured loans — the kind that most newly minted franchise owners need to cover their initial investment costs.
Lately, though, franchisors have reported that their franchisee candidates are finding it easier to borrow money, even in the form of unsecured loans. It’s a sign that the economy is on the road to recovery and that banks are recognizing the benefits of lending money to worthy business ventures.
Late last year, the International Franchise Association projected 2012 franchise growth of 14,000 new units and 168,000 new jobs. If the thaw continues and the economy continues to recover, franchise experts believe, the franchise industry’s growth could surpass even those projections. And the prognostications for 2013 are even better – all signs that a hurting economy is on the mend.
Here are some of this year’s developments:
The recovery is gaining momentum, and people interested in self-employment should consider franchise ownership, a proven way for professionals to build fulfilling and successful careers for themselves without absorbing all the risk of a pure startup. Franchise systems provide franchisees with blueprints for success, and hard work takes care of the rest.
About the author: Jania Bailey is President and COO of FranNet (www.frannet.com) and author of “Thriving – The Journey to Success in the Business World.”
It has always been clear that entrepreneurism is the surest path towards financial freedom. But in 2012 it may also be the only sure bet on the table. The costs of living continue to rise, while employees’ paychecks stagnate or even shrink. If you are lucky enough to have a significant amount of capital on hand, because you already run a successful business, you’ve invested wisely, you’ve come into an inheritance or because you’ve worked long and hard for several decades, you’d be wise to get into the business world. But should you start your own business or purchase an existing one? There are pros and cons to each, so consider the question from all angles before making your choice.
First of all, there is the issue of risk. The majority of small businesses won’t last through their first five years, regardless of how strong the initial idea. Venture capital companies spend months researching businesses to invest in, and they still choose companies that fail around 20% of the time. When you start a business you have no idea if your great idea will translate into consistent customer interaction, or if a bigger competitor will simply blow you out of the water. When you buy a company that is already established, you know they have customers, a strong reputation and a workable bottom line. Instead of starting from scratch you only have to improve what is already in place. At first glance, that seems much preferable.
The way value is created or dispersed is also very different in each case. When you start your own business, you are responsible for creating all the value. Where nothing existed now there is something, and every good choice you make along the way increases the financial value of the company. You get out of it what you put in, in a fairly organic development. When you buy out an existing company you are paying for value that has already been created. That means you end up having to pony up financially for all of the sweat equity that went into making the company what it is. You may end up having to pay more for the company than it is worth in reality, just to placate the previous owners. And then you won’t have the money on hand to improve upon the company.
When you buy an existing company, you could also face taking on preexisting problems you weren’t prepared for. Your lawyer and accountant will of course look over everything top to bottom, but issues can still slip through the cracks that limit your ability to make money off of the purchase in the future. When you start the business yourself there are no such surprises. Of course, you may be limited by problems you created yourself, and will suffer the consequences if you can’t turn things around. But you’ll have the benefit of knowing the business inside and out, and less surprises means less headaches.
Finally, you’ll have to think about the rewards of a purchase versus the rewards of starting from scratch. Financially you’ll begin to make money right away if you buy out a company, as it is already well established and probably turning a profit. Startups could take years to become profitable, and in fact could lose money at first. Starting from scratch requires vision and patience, while buying a company requires nothing but a savvy Tampa business broker and a large chunk of liquid capital. One choice isn’t necessarily better than the other, but your temperament could be the deciding factor between the two.
Starting a business after 40 can be a good way to generate after retirement income. All businesses however require financing some form of financing. Depending on what kind of businesses you want to start, there are a number of options that one can consider.
This is the option chosen by me. I decided to start this blog as way to generate income. My yearly expense was USD10 for a domain and USD50-70 for hosting. I also paid USD129 for a professional theme and less than USD50 for a customised logo. Total cost came up to less than USD500 for starting a blog business which is why I can go for the self financing route. Currently this site generates around USD500 per month and can be considered a good return on my investment.
However not all online businesses are as capital efficient as a blog. ECommerce stores for example require you to stock up inventory. That will cost extra and that is when you might want to consider other financing options.
If the business financing goes beyond what you can self finance, you can considering raising money from your close family or friends. Collectively, they can typically offer a loan of up to USD50,000. However, asking money from family and friends is never easy. If there is something you feel uneasy about, then the next financing option might be suitable for you.
The next option is to get a personal loan. This is for businesses that require capital of less than USD100,000. This financing option is good for physical stores or online businesses that are more capital intensive than a blog. Usually, banks will require the lender to be evidence of a regular salary or an asset pledge or both in some cases. Currently, there are even small business loans for folks who are entrepreneurial in spirit. This is an alternative to a personal loan that you can consider.
If you are have a bigger ambition, then it is possible to raise money from venture capitalists or angel investors. This investment group is looking to finance business ideas that are scalable and is able to address a big market. If you business idea requires that kind of investment then this is the group you should be talking to. However, getting equity investments is never easy. You might need to delicate at least 6 months to prepare for the kind of due diligence work that these investors require.
This is a more radical idea but one that is becoming more common. If you have a business that addresses a pain in the market, there will be customers who might want to pay you upfront so that they get priority in terms of enjoying your solution. This requires you to get out there and talk to potential customers as much as you can. Find out what is really their pain points and create a mock up of your solution. Then present the mock up to your customers again and see if this is something they are looking out. If you get this right, there will be people dying to give you their money first so that they can get their hands on the solution as fast as possible.
A more recent financing option is crowd funding. On websites such as Kickstarter, you can list your project or business ideas and explain why the crowd should fund you. These type of funding is more suited for technology or innovative projects that carry a lot of risk.
Hope this is useful for you to start a business and generate some after retirement income.
Finally making the decision to start your very own business is exciting, intimidating, and invigorating, all at once. It can be one of the most daring things we choose to do in our lives, and this is because of the considerable amount of risk that can be involved in something like getting ready to start your own company and start being responsible for making your own living. As such, there are plenty of things you should make sure you spend some a good amount of time considering before you really get to throwing your money and free time into starting up your own business.
1. Consider Your Expertise. This one seems pretty obvious, but you might be surprised how many overly-ambitious would-be entrepreneurs toss themselves headlong into a venture that they’re not even in the least bit prepared for. Perhaps the restaurant industry is a good candidate for the place where this happens the most.
2. Consider Your Budget. It costs a lot of money to operate a business, and for a lot of reasons. You’ll need a huge amount of capital just to get things started, and then you’ve got purchasing to think about, you’ve got supplies and employees, and you’ve got all sorts of other overhead like building rent and utilities. You should prepare a very thorough budget so you can know what to expect of your new business and can anticipate what it’ll take to handle it.
3. Consider the Market. It’s great that you’ve got a passion into which you’re about to invest yourself, and having a budget is just the icing on that cake of opportunity — but there’s still a very important piece that needs to come into play before you’re ready to even think about starting a business, and that’s the market. Is anybody going to be wanting to buy what you’re selling? Some of the best things to consider are whether or not there’s an established demand or use for whatever it is you’re going to trade in, and whether or not a good amount of competition seem to have noticed this, as well. If your area doesn’t seem like it’d be hospitable to your idea, maybe think about trying something else.
4. Consider Your Savings. Remember that capital we talked about a couple of points ago? That’s an incredibly important part of getting a business started. Whether you’re insanely cash-rich or take out a business loan (it’s more than likely you’ll be doing the latter), your savings are still important. They’re important if you’re cash-rich because you’ve got to make sure you don’t waste your savings on an idea that won’t pan out, and they’re important if you’re taking out a loan because banks think highly of how much money you’re keeping in them when they’re deciding whether or not to lend you more of that money.
5. Consider Your Customer. Think about the people to whom you’ll be selling. Think about those to whom you’ll most likely sell — and think about those to whom you would ideally sell. When your business starts up, nobody’s going to care about it unless you’re some prominent member of your community, or are fresh on the heels of some type of very popular success. In most cases, half the work of starting a business is actually getting people to realize it’s there. The best thing is that this can now be done for free. You can reach everyone from professional employer organizations to the average consumer on a very limited budget these days — all you really need is a laptop and some creativity. Building a successful new business has literally never been easier!
There are so many opportunities in franchising that it’s tough to know which ones are the best ones and which ones are worth further investigating. Before you sign anything with a franchisor, here are some questions you must ask if you want to make sure they know you’re serious about their business.
When entrepreneurs begin talking with franchise systems, they tend to ask pretty standard questions: How much money can I make? How much will I have to spend? How big can I get? Is the franchise territory exclusive? They’re sort of the first-floor questions, if you will.
But the higher you go in the building, the more pointed and detailed the questions get, and they’re critical for a franchisee candidate to ask before signing the franchise agreement. Here are five:
Most good franchise systems, understanding how important the first year of franchise ownership is and how likely a new owner is to struggle, provide extra support and coaching. It could mean the home office assuming all responsibility for marketing, or using customer service reps in a call center to schedule jobs while the franchise owner concentrates on executing the baseline work.
There are all kinds of ways of offering support. But it’s important for any franchisee to know what kind of help he’ll be getting at a time when he’ll be needing it most.
The test of a good franchise system isn’t how well it works with top performers. That’s easy. It’s how it helps franchise owners when they struggle. Even the smartest and hardest-working business owners in rock-solid systems run into challenges every now and then.
When that happens, the franchisor’s operations staff should be prepared to help the owner respond to the problem effectively. Experienced operations staffers have seen almost everything.
Don’t overlook this. It’s important to be protected in case of accident or natural disaster (this is especially true in food franchise systems), and you need to include the expense in your budget.
Smart franchise systems understand that their franchisees need to keep their skills honed, and franchisees in the system need to stay abreast of best practices — which, depending on the field, can change in days or weeks! Ongoing training opportunities are great for a secondary reason: They send the message that the franchisor cares enough about its franchise owners to give them the tools to succeed.
A culture of cooperation among franchise owners can make the difference between success and failure, and good franchise systems go out of their way to foster good will. Incentives help: Franchisors can single out especially helpful veteran franchise owners in internal communications, or they can give monthly “helping hand” awards for the franchisee who most helped first-year owners.
Systems like these automatically pay themselves forward; as franchisees mature, they find they want to reach out to new franchise owners to help them the way they were helped when they started. That kind of culture can make a huge difference for the entire system.
About the author: Jania Bailey is President and COO of FranNet (www.frannet.com) and author of “Thriving – The Journey to Success in the Business World.”