Help Wanted: Professional Advice

As a new and emerging business owner, I need professional advice…not just the advice and stories of my fellow entrepreneurs, though they are very helpful.  Specifically, I need legal and accounting advice that will take my business to the next level — the level of actual prosperity!  Ok, right now, I’d settle for liquidity and not eating into my savings.

For those of you who don’t know me and haven’t read my blog, I like and listen to lots of business/financial/business books on tape…I prefer what’s on sale at the various Half Price Book stores.

Among them are the Robert Kiyosaki books (Rich Dad, Poor Dad) and some of his advisers…I liked what one attorney had to say about the various business entities and their pros/cons, so I wrote to them and they sent me an email with a long attachment that I have yet to read.

I also listen to Dave Ramsey on the radio here in Big D, and he has “endorsed local providers” (ELPs) including accountants (I did not see attorneys listed)…so I called him and met him for my free consultation…He gave some great advice and had reasonable prices…now it is just up to me to organize my files so that I can efficiently use my not-free consultation…only one other person had a recommendation for an accountant.  That accountant said he was too expensive for me, and directed me to a perfectly nice coworker who had lower rates.  She seemed nice enough.

But it has struck me as to how few people even use attorneys or accountants, and how few of those recommend these professionals!  My author advisers all talk about the importance  of having a good solid team of advisers around you…not only attorney and accountant, but also an investment adviser…I have my funds at Fidelity and everyone I get on the phone seems nice enough and knowledgeable enough, but where do I find a great team to surround myself with?  And how do I know they are great?  And is there any chance that they would ever interact with each other?

What is a small business person to do?

I will keep you posted on what I learn from each of these advisers, but I need your help in getting (a) more good info from your advisers and (b) advice on how to find and judge those advisers.

Thoughts?  Anyone?

Shark Tips for Entrepreneurs

Love, love, LOVE my Shark Tank!  Almost all of the Sharks on Shark Tank have books, but I only found one to be a page-turner so far — Kevin Harrington’s Act Now! How I Turn Ideas into Million-Dollar Products.

Harrington is the self-proclaimed King of the Infomercial.  The book is written with the backdrop of the infomercial industry.  It’s a very interesting history of how that industry blossomed.  In the meantime, Kevin gives some very good business advice that is applicable regardless of what industry you’re in.

Here are some highlights:

1) When you make a deal for rights, try your best for an agreement that covers every potential source of income. Harrington learned this lesson when he made deals on selling items on TV, but then lost out when it was sold via retail outlets.

2) If you plan to build a big business with another person, spend the time – and the legal fees – to work every detail of the agreement…And never enter an important deal without spelling out an exit strategy.

3) Don’t sell the product – sell the story. I’ve heard this before, or at least things similar – don’t worry just about the product. For example, Rich Dad’s Robert Kiyosaki says people spend too much time and money on perfecting their product or service that they miss out on an opportunity.  No one says you shouldn’t have a good product or service, but that it just needs to be “good enough” to get started.  The marketing and/or the story surrounding your product or service is just as important…as is the mere fact that you are selling something!

4) Whatever business  you are in, never stop looking for the next hot deal.

5) Knocking on a series of wrong doors can be frustrating, but if you’re paying attention, it can also lead to valuable insights. This is also a lesson that I’ve heard in other books – basically, you should learn from everything, both good and bad experiences.

6) This is one of my personal favorite lessons, but I learned it as a reporter: “No” doesn’t necessarily mean “never.”  Sometimes it means, “You haven’t offered me something irresistible.  You haven’t offered me something I can’t afford to turn down.”

7) You can get yourself in front of important people, people who everyone else would say are totally inaccessible, by letting them know you can make them a lot of money.  Before Harrington was a big name, he was able to get in front of Donald Trump to ask him to be in an infomercial, even though everyone said Trump would never take the meeting.  While that project didn’t work out, they did later work together.

8) Always look to do business with people you would happily invite to Christmas dinner.  Conversely, I would say that you should aspire to be the type of person people want to invite to Christmas dinner!  One of the key reasons I love my Dancing With The Stars is that the stars always smile through the criticism.  I wish I was that person…I’m trying 🙂

9) To take advantage of sudden opportunities, maintain strong relationships with partner companies, and keep a lean organization staffed with people who can spring into action on a moment’s notice. Sorta goes back to the “be nice” suggestion above.  Networking is key to moving fast.

In addition to the life lessons above (and many more in the book, but a lot are sales related), Harrington also says over the years he’s created a 9-step process for selling/releasing products:

• Product development
• Due diligence
• Creative phase
• Production
• Operational phase
• Market testing
• Creative tweaking
• Rollout
• Back-end marketing

My fave of his quotes of famous people:

“Success consists of going from failure to failure without loss of enthusiasm.” – Winston Churchill

This is a good quick read…I recommend it…I also recommend the show – Shark Tank – you get a lot of good tips for what investors are looking for before they will give you any money — sales, cost of customer acquisition, commitment…can’t wait for the next season!  Until then, it’s Undercover Boss.

Diggin’ the Rich Dad

As promised, here’s my review of Rich Dad’s Increase Your Financial IQ by Robert Kiyosaki.  It’s a great companion piece to Larry Winget’s You’re Broke Because You Want to Be.

I have to admit up front that I’m a big Rich Dad, Poor Dad fan.  Kiyosaki’s basic overall premise is that it’s better to live off of income from assets than income from a paycheck.  You get to keep more of your money (lower tax rate on capital gains vs. income tax, and more write offs), plus your income doesn’t depend on the number of hours you’re willing to work.  At some point, we are all going to have to stop going into the office.  Kiyosaki just wants you to be able to stop working long days sooner rather than later!  It’s better to prepare and choose your office retirement, than have someone else choose the day for you.

In this audio tape, Kiyosaki assumes you know his basic premise, though he does repeat some of his history.  He defines “Financial IQ” as the measurement of your financial intelligence — in other words, how much of your money you learn to keep.  Here are his “Five Financial IQs” or five ways to increase the measure of your financial intelligence — aka “the cash in your pocket.”

1. Making More Money – Learn how to make the highest, best use of your money. He suggests putting 30% of each paycheck aside for investing later in assets that will bring you returns.  The premise being that you’ll bust your hump to pay your electric bill, but not set aside for assets…so if you set aside 30% and your electric bill is hanging out there, you’re more likely to go pick up an extra job or work another shift.
2. Protecting Your Money – Learn how to best protect your income from taxes, attorneys, high expenses, and more – legally, of course!
3. Budgeting Your Money – Spend your money on the right things, such as assets that bring you passive income.
4. Leveraging Your Money – Calculate where and when best to borrow money – from banks or partners – to use for acquiring assets that will bring in cashflow, and give you a high Return on Investment (ROI), aka “make more money per dollar spent.”
5. Improving Your Financial Information – Keep an eye out for opportunities to learn more about financial opportunities, and never underestimate the power of learning from experience.  Take calculated risks, and learn from your mistakes.

This is another set of CDs (3 for about 6 hours of total time) that I play over and over.  Each time I learn something new…and no, I don’t miss the Pop 10 hits on the radio…though I do take time 1-4p to listen to Dave Ramsey, and the occasional tune in to NPR.

A Rant About Being Broke

In my quest to learn more about business and money and the security it can provide, I recently purchased a couple of audio books on sale for a mere $5 each at Half Price Books.  The first one was You’re Broke Because You Want to Be: How to Stop Getting By and Start Getting Ahead by Larry Winget, and the second was the latest by Robert Kiyosaki, Rich Dad’s Increase Your Financial IQ. Today, I will discuss the Larry Winget audio book.

I am happy to report that I  have taken all of the steps he recommends, save one — I have yet to tear up all of my credit cards.  However, I am down to one and I use it primarily for online purchases or recurring purchases — two things I’m not comfortable using my debit card for.

He asks the following Qs:  Are you spending more than you earn?  Are you worried about how you’re going to pay your bills? Are  you living paycheck to paycheck?  Is Social Security your only retirement plan?

We all know that to lose weight we must eat less and move more.  Larry reminds you that finances are the same — if you want to get ahead financially, you need to spend less and earn more.  The hard part is getting people to do what they know they need to do, not what they want to do.

Winget’s financial diet steps are simple — get a second job, cancel your cable and your gym memberships, eat out less/eat home more, etc.  All of this is like the crash diet that gets you to your desired weight.  Once at the desired financial place, he reminds you to keep living within your means.

But he doesn’t say that you must forever live in your new, downsized lifestyle.  Winget includes written exercises (OK, so maybe the first time you listen, you should be parked in your home) that help you realize what your ideal lifestyle will cost, and gives you realistic goals to aim for in terms of income.  Conversely, he shows you how much you’re expectations will need to change if you do not want to pay the price of that ideal lifestyle.

So, did I just save you $5 at Half Price Books?  (Actually, I think the sale is over now, but full-price is under $20 and well worth it — but pay in cash! ) NO!  If you need to be in financial rehab, then you need to get your own copy and play it while running your errands or on a long trip to visit relatives or on vacation – sort of like your own personal sponsor.  It isn’t that what Winget says is rocket science, but sometimes we have to be reminded that the answer to our problems is within our grasp.  It’s a matter of creating new habits that move us forward, and replace those habits that have kept us back.

Given the economic landscape we now find ourselves in, it is more important than ever that we focus on our finances.  Nothing is certain – not your job, not your investments, not your friends/family (who are most likely suffering your same fate).  Let’s take this opportunity to rethink what we want to spend our money on, and what the real cost is of our current lifestyle.  Regardless of whether we are in an economic recovery or not, I certainly hope that Americans remember these lessons that Winget — and Dave Ramsey and Clark Howard and Suze Orman — have been preaching for years:  Live within your means.

Living within our means sounds easy in theory, but is difficult in practice.  For example, as an Accidental Entrepreneur for less than 2 years, I am frustrated that I cannot get a home loan because the banks/credit unions require two years of tax returns for the self-employed.  But maybe that is for the best.  Could they be saving me from an overly optimistic estimate of what I’ll make this year – and that I can sustain that amount?  Maybe so.

However, I don’t understand why I would qualify for that same home loan if I had “a W2 job” for two weeks.  I’m not convinced that corporations are done with their massive layoffs and/or bankruptcies.  No inside info here, but I know from the news and anecdotal experiences of friends, that it’s harder for businesses to get credit and many customers are taking longer to pay their bills, leaving corporations to straddle this ever widening cashflow chasm.  I don’t think it takes an economist or financial guru to figure out that more companies are going to be stretched too far, and fall headlong into the cash void.

Is the answer, then to not hand out mortgages?  No, but maybe it means that we need to rethink how we buy homes.  Maybe Dave Ramsey is right when he promotes 15-year mortgages only that have payments which are less than 25% of your net (take home pay).

Maybe Suze Orman is right that the next big companies/industry to crash will be the credit card companies.  The industry has just had a lot of new regs put in place that limit their ability to raise rates and collect back debt.  Make no mistake, they must make a profit.  The question is only: Where will it come from?  The thousands of Americans whose budgets  depend on credit cards or who have unwieldy balances are going to be in trouble when the credit card companies realize they have a lot of bad risk, and call in the debt.

If you live in Dallas and are broke, please borrow the Larry Winget tapes from me!