Category: Small business owners

So this story we are telling you about today, is about one of our long-term clients from our business consulting division, and we have his permission to tell the story publicly in this article.

Eric is an old client of ours, and he is 43 years old and he runs a smaller construction and roofing business with 20+ employees.

His company does 3 million dollar a year in turnover and he is the sole owner, and the company has zero debt.

He started the company 21 years ago at the age of 22 so he is a self made guy.

So these are the positive thing about Erics financial situation.

He has a salary of 500.0000 dollars a year and he pays 40% in tax and he lives with his two dogs in a 3 bedroom town house.

Eric has a net income of 300.000 dollars and he has fixed costs of 80.000 dollars a year and then comes the cash purchases of food and other things.

So now you would think if you do the math that maybe he has invested and saved almost 200.000 dollars a year for many years so this guy is doing really well!.

Here comes the bad news with Eric, he is a gambler and he plays both online casinos and he bets heavily on sports, where NBA,NFL,NHL and European soccer is his favorite’s to bet on.

This heavy gambling takes place in Erics life when he comes home from work, and before he goes to bed he bets on many objects that takes place over night.

We have had several conversations with Eric over the past 9 years that he has been a client of ours, that maybe it would be a good idea to stop gambling and just invest his money on the stock market and into real estate instead.

Eric has not been willing to do that, and he has told as that he wants to continue betting on sports because he likes it to much.

So what has now changed?, in April Eric lost his best friend to Covid-19 and he was devastated and he wanted to pay of his late friends mortgage to help the two children and the widow out.

Here comes the wake up call, Eric figures out that he was no savings , no stocks or bonds that he can sell to cover the mortgage and no 401K to take money out of.

Eric now contacts us and demands a meeting the same day, and his request is that we take over his finances for 3 year period, true a wide Power of attorney.

So he requests that we take care of his personal finances and in his business finances.

He also ask us to put him on NEGA, our gambling treatment program that we have developed over the past 20 years time.

So in May this year Mrlifeadvise consulting takes over his finances together with a CPA to make sure that we handle everything correctly.

So after having lost around 3.7 million dollars over a 20+ year period Eric is now for the first time in his adult life free from the gambling demon, and he has opened up a trading account to buy stocks from each monthly paycheck as a type of 401K savings account.

He has had many emotionally bad days and some days where he has been upset with himself for wasting all this money over all this time.

And if he had invested these money into global index funds his portfolio would have been worth anywhere from 6-9 million dollars in 2020.

Instead of like now having almost nothing in his savings account.

So Eric is still one of the lucky ones, he has a company that are still doing 85% of the business he had before COVID-19 , and he still has time at the age of 43 to change his life around.

He is one of these cases that we do not here about, since he has not hit rock bottom , because he has been able to always pay his bills and take care of his business true all these years.

But if something would to happen to his business and it would go under then ,Eric would have nothing saved up for a rainy day.

So even if you are not a gambler who have accumulated debts, you should ask yourself do i have any saving or do i spend all my loose money gambling?.

Erics father was a lawyer with a very serious gambling problem when it came to OTB/Horse betting and he developed also a heavy drinking problem and he died pennyless at the age of 72 years in a studio apartment and he did not have more than 4 dollars in assets, so Eric paid for the funeral.

So our read on why Eric had his wake up call, is because when he had to attend his best friends funeral and when he could not just pay away his best friends mortgage in a day, he saw his own future life flash before his eyes, that maybe he would end up in a studio apartment penny less 30 years from now if he does not stop gambling today!.

So stopping before hitting rock bottom with any addiction, is always the best thing you can do and always ask for help, you will not be able to white knuckle it on your own!.

Today Eric called us, and said that he feels better than ever, he sleeps 8 h a night he does not wake up thinking to himself how are the games going that he has a lot of money riding on them.

And he spends more time outdoors hiking with his two dogs, and takes his deceased friends kids out on activities every weekend(he is the god father).

Eric also told us that he is so stress free on a personal level, the business side he can always deal with, but the personal level is something that he feels now looking back at his life that the mornings waking up when he had lost 12.000 dollars on bad sports bets and going to work and faking a smile to keep the spirits up towards his workers was difficult.

So waking up stress free is something he really enjoys, and he is now paying off his best friends mortgage on their house on a monthly basis.

So if you want to help somebody, try and clean them up and get them treament, you can do so much by just being there and helping out, going to AA,AN,GA and other meetings is so important and many times people need a push to take that step, they are not always able to make that decision on their own!.

It takes a lot of gut from a 43 years old successful business owner to go and ask for help with his finances and this is not a sign of weakness but actually a sing of strength that you reach out for help!.

So if you know anybody who has a gambling addiction, then you should really check out our program NEGA(NEVER EVER GAMBLE AGAIN) here attached and in our store.

So take care everybody.

Mrlifeadvise.

NEGA/NEVER EVER GAMBLE AGAIN

Hi, everybody, we get this question a lot these days in COVID-19 times, when some companies are doing very well despite the Covid-19 PANDEMIC AND SOME COMPANIES ARE IN BIG TROUBLE.

So what we know from research is that the first generation start it, the second generations grows it and refines it and the third generations squanders it.

So this is of course not 100% true with all companies, but the general rule is that the second generations should sell the family company and the third generations should do something else with their lives.

The stress level that comes with taking over a family owned business in the third generations is very hard to cope with.

There is also one very important aspect that families do not talk about and that is that the sibling rivalry that can happen when you run a family business it can destroy the family bonds for ever.

So siblings can have these horrible falling outs over a family run business.

And it is very important that the generation that is handing down the family business structures everything properly legally to avoid these sibling rivalries.

So when you work in a family business it comes with a lot of pressure and it is usually very bad for the family relations.

If the business does well then it is , who makes more money, and if it goes bad it is who does not pull their weight enough in the company and the blame game goes around, and never really stops.

So there is something to be said about selling the family business just is the right moment to keep the peace in a family.

We know that families who do not work together gets along much better with each other , than families who also works together.

There is people who will disagree with this article, but quite frankly as a business consulting company who mainly deals with family run businesses and companies that have several family members involved in them , we can say with certainty based up on our experience that this statement is very true.

It is not so much that siblings and family members wants to butt heads with each other, but business environment is very stressful and normally you work with people that are your colleagues, but then you go home for the day, with family your lives are so entangled with each other, so you never really get that stress free zone.

So even if it is difficult to let go of a family owned business sometimes it is the best thing you can do , is to sell it outright and then share the proceeds and let everybody go their own way.

Let us give you a typical example of a fight that takes place in a family owned business, so let us say that the sales manger/marketing manager wants to spend 25.000 dollars on an ad for the business, and the CEO does not approve of that spending, and they are brothers and they have a huge fight over this one thing on a Friday.

Then there is a family birthday the next day and they need to see each other on this Saturday and play nice.

Compared to if they only would work together and not be related, so then they would see each other on Monday where cooler heads can prevail.

So working in a family business is a really tall ask for anybody and it is something that you should normally avoid if you can.

If you are an owner of a family business and there are constant fights within the business , maybe let som people go or just sell the business outright and keep the peace in the family.

Because family matter and it is very important, and never ever let money come between you and your family.

Mrlifeadvise.

So the bad news for small business owners that owns bars and nightclubs is that the world economy has changed forever!

Because the COVID-19 will linger and come back in different waves and there is a likelihood that we will see new strains in the next couple of years.

These are all very bad news for bars/pubs and smaller nightclubs.

Customers will not want to go out and risk getting infected by the very close contact of a full pub/bar or nightclub during this year and the next year 2021.

There will be some customers who do not care, but most people will drink at home, and keep smaller backyard gatherings rather than going out on the town.

This will unfortunately affect a lot of cities like New Orleans and New York among many others.

There might be some places outside of the big cities that might start to move closer to the old times.

But the likelihood is that 1/3 of the workforce for the hospitality industry will not get their jobs back.

This is a very sad fact, that we will see a lot of hospitality workers will not get their job back.

So for those, this is a very important time to figure out what-else they could be working with in the future.

So taking time now to reflect will be very important on what-else you could be working with in the future.

Take care,stay safe.

Mrlifeadvise.

So what are the top 5 reasons new businesses fail inside a 2 year period.

Reason number 1: This is a very common mistake new business owners do and that is that you underestimate the cost of running the business on a day to day basis.

What this actually means is that you dont count in all the costs that you should, when you start your business in the first place.

This can mean all the utilities and storefront costs or warehouse costs.

Usually you count in the the rent but there is so much more like insurance,theft,vandalism and similar types of costs, that comes with every psychical business.

But there is also other hidden costs like opening up phone-lines or staples and, usually there is a few invoices every month that you did not plan for in your business plan budget.

Let say that if you want to be on the safe side when it comes to making sure that you can cover your unexpected costs, you should count your budget up by 50% each month.

So if your business plan says that you should be able to get away with spending 5000 dollars a month all and all.

This actually mans that you should calculate for 7500 dollars instead.

This way you are covered.

Reason number 2: This is also very common and an easy mistake to do as a new business owner.

It is overspending on marketing and similar material for your business.

You been saving and waiting to start your business and you got a loan to top it all off, and now you want to really get going.

But hang on a minute, this is where new companies get into trouble.

You want everybody to know about your store front or company and you market hard and you market everywhere and very quickly you have spent a 5 figure amount in your first year on marketing.

Normally you should try and grow your business the first 1-2 years as organic as possible and really save on the marketing dollars.

And when you do marketing you should target just the people that you think could become a future customer to your business.

So here we would recommend to spend a little bit on google ad words and a little bit on Facebook ads and then look at Instagram influensers in your area with a following of 500-2000 people.

And maybe even taking out a small weekly ad in the local paper or free paper if you are also targeting older customers from 60+ years and upwards with your storefront, or your business.

We know a lot of people say that you have to be on the first page in the google search to be relevant, but you also need to find out how much that will cost you.

Because more often than not you will pay true your nose to reach the first page on google, and for most smaller business this is not an absolute must.

There are ways true back-links and other SEO options to land pretty high on search engines without paying true your nose.

Reason number 3: This is also a very common mistake that new business owners do and that is that you hire staff in your first year of business.

When you take on staff you have to understand that it is much more than maybe the 15-25 dollars and hour that you will have to pay.

And those things are payroll taxes and other social costs so usually count 1.5x on the salary when you hire somebody.

Second thing that you need to keep in mind when you hire a person and usually your first employee, is that you figure out if this is a short term or long-term person for your business.

We will give you an example here if we look at your first employee that you could see saying on for a longer period of time.

If you feel that this person is a long-term option for your business then try and teach that person to do many different job, within your company.

This way you have some multitasking going on.

And you can here pay a little bit more than you should if the person is a temporary solution for your business.

Then the second option is that you need a person for store gig and it is not a big job, then you can a little bit less for that person.

And take it for what it is.

Here we want o also be very clear that the better you treat your employees the better job they will do, and simple small stuff like free coffee of high quality in your store/company made in house with a quality coffee maker(costs under 100 dollars to buy) will make all the difference in how they look at you as their boss and employer.

It is the small stuff that keeps workers loyal to their employee for years to come.

Simple stuff like giving them time off in the middle of the day to bring their pet to the vet or to go to a dentist appointment.

Good workers will respond well to this kind of treatment and will give their all back to your business.

Reason number 4: This one is tied to your companies finances and that is to keep a rolling stock going .

What we mean by that is that you need to avoid having a stock of goods that cost you a lot, but that does not move around fast enough, this is what we mean by a rolling stock.

A rolling stock is a stock of merchandise that moves with in a maximum time frame of 60 days.

This way you dont tie up much needed cash flow for your newly started business.

What is often said from experts are that it is better not have a special item in stock when you are a new business even if you lose that particular sale, rather than having a lot of these items in stock and they move very slow or once every other year.

So during the first 2 years time try and avoid to get sucked in to a larger stock of merchandise unless you have unlimited funds to do so.

Reason number 5: This once is something that we seldom hear advisers talk about.

But it is such an important aspect of how your business will be a success going forward.

And that is you as the owner/leader/worker.

What is it? NUTRITION that is what it is!.

So often a new business owner has to work 16+ hour day and that also means that you will spike your stress hormone cortisol to a max level.

And the more high quality high octane fuel you put into your body the better off you are, when trying to succeed with your business.

So if you can eat as much plant based nutrition/food as possible, look at Lewis Hamilton and Rafael Nadal as an example of how well they preform on plant based nutrition.

If this is to difficult for you, try and use Casein protein in combination with Oat meal and chicken and potatoes and also add veggies and fruit into your daily nutrition intake.

So the nutrition intake is so important when you work a lot and when you work under very stressful circumstances.

So these are a few pointers that all new business owners should take to heart to really succeed with their new business venture.

Thank you for reading.

Mrlifeadvise.

So okay the worst thing that can happen , happens and you lose your small or medium sized business, what happens next?!.

So you have lost your business and regardless if you did something wrong or the market crashes or the lenders called in the notes, or what ever the reason was that forced the business to close, it does not matter right now!.

What matter right now is that you keep on going and moving your life forward.

You should know that there is a ton of successful people that failed at one point in their life and lost there business also so you are not the first person this happens to and you will for sure not be the last person.

And then some people rebuilt at some point and opened up a new business.

And some did not do so!.

There is also some bigger angel investors in silicon valley who do not invest a dime in a company if the owner has never had a failure/bankruptcy closing what ever you want to call it.

And the reason for this is that you learn a lot from going out of business , things that you can bring with you into your next project or your new job.

So we will list the to do list here for you and the things you should not do to survive and move forward in your life.

No1: The first thing you do is that you go out and look for a good paying job in the business you just came from.

And more often than not you will find this job with one of your former competitors.

So now people say , how can you go and work for a former competitors.

This is actually very simple, you swallow your pride and you contact the owner/ceo of one or several of your competitors and you say to them like something like this.

You know that i went out of business, but this was the reason and then you tell them the reason.

I am now looking for a long-term job, and i can bring all my skills and contacts into your business if you hire me!.

And if they are smart they will hire you, because it will increase the value of their business.

No2: You will have to make some tough choices if you can keep your house or not, if you still have it,and how much do you owe on the first and second mortgage, and do you stay or do you leave your house.

Here you have to be careful so you dont make a mistake for emotional attachment reasons towards your property/house.

No3: Try and tell your family that life will become better in the future, and that you will be an employee for a few years at least, 3-5 years is the minimum suggested time, unless you are sitting on real capital and you can open up a new business quickly again!.

The reason for the suggested 3 to 5 years is that , this is usually the time frame for a person that has lost his or her business to get back on their feet again, both financially and emotionally.

If your significant other wants a divorce which is very common when a company goes out of business, we believe that it is a 70% chance that a divorce will occur within 2 years from the time a family business goes under, to when the divorce happens.

The best advise we can give is to accept the divorce and move forward with your life.

Because your partner has given up on you and does not believe in you anymore, and most likely will never ever believe in you again!.

No4: Zero out your brain as a business owner, and become an employee in your own head.

There are benefits in not running your own business and not everybody is suited for doing that.

So having a boss that gives you orders, lets you relax your brain and you can shut out some noise for a few years that you could never do as a small or medium sized business owner.

Because everything was always riding on you.

No5: After 3-5 years you can think it true very carefully if you should start up something again or if you should stay a salary-man or salary-woman.

Think things true very carefully on what went wrong the last time and try and not to make the same mistakes twice, if you decide to give it another go as a business owner.

A good thing could be to start on the side on evenings and weekends for the first 1-2 years, so you have enough customers so if you quit your job, so you can draw a paycheck the first month of leaving your job.

No6: Look for investors if you are in a cash intensive business.

Because now you have lost so many years, that to catch up you need real capital to get going again.

There are a few things that you should not do, when trying to get back on your feet again.

No7: Do not feel sorry for yourself in any way shape or form.

Shit happens and life goes on.

So by dwelling on sad things like going out of business is not gonna get you moving forward.

No8: The second thing is that dont start abusing anything like alcohol or drugs, let the pain be raw and real.

You will heal much faster and get back on your feet again, by not starting with any kind of self medication.

I know these pointers no7 and no8 are difficult not to start with in some way shape or form.

But take it from people who have lost companies with over 800 employees and gone back to being an employee again, you have to stay the course to be able to ride out the storm you are in!.

Yes it stings having to take orders and having to jump true hops as an employee, but what is the other options that you have.

Sitting at home drinking and watching tv for a year or two, will just set you back with your career.

And going back to work after losing your business will also keep your mind busy.

So here are a few pointers on what to do when you lose your company and go out of business.

Thank you for reading.

Mrlifeadvise.