Monthly Archives: August 2016

Learn More About Business Owners Need a Plan B for Retirement

Are small business owners too busy to think about retirement? That’s one take from a startling new report from BMO Wealth Management. It found only a fraction of the nation’s 28 million small business owners are prepared for retirement. For instance, 75 percent have saved less than $100,000 in retirement funds.

Small businesses, defined as companies with fewer than 500 employees, represent 99.7 percent of all employer firms — employing almost half of all U.S. workers, according to the U.S. Small Business Administration (SBA). So how is it that owners of these “little engines” that drive our economy are neglecting their own retirement?

To answer that question, we need to understand a bit about these business owners. Most established, successful business owners and professionals tend to fit in one of two camps:

Business owner type 1.
Your business is your primary savings and retirement plan. You reinvest most of your profits into your business. You have confidence in your business, so you keep rolling the dice in the hopes of building your company and increasing your revenues.

Many business owners are banking on selling their businesses to retire, but that is a very risky proposition. There’s no guarantee you’ll be able to sell your business for anything even close to what you think it’s worth — and you might not even be able to sell it at all.

Industries and markets get disrupted — sometimes overnight. The statistics about selling a business are sobering — only 20 percent of businesses listed for sale ever sell, and if you’re one of the lucky ones who gets it done, the IRS will take up to 45 percent of the sales price in taxes.

Business owner type 2.
These individuals are more diversified outside of their business. Some may hold conventional retirement accounts such as a 401(k), IRA or profit sharing, college savings, real estate investments or cash stashed in a savings or money market account for fast access to capital.

Both types of business owners face risks associated with conventional investments and the risks of not being able to sell their business for what they expected.

The reality is that you’re doubling down on your risk by gambling with your money both inside and outside of your business. Regardless of which type best describes you, the critical question you should ask yourself is this — “What’s my ‘Plan B’ for my business?” How can you create a Plan B that will help you retire safely and securely? Start by asking what your retirement account be worth on the day you plan to tap into it? Most business owners cannot answer this question.

The problem with conventional financial and retirement planning is that it’s based on things you can’t predict or control, like how much money you’ll really have when you retire or how long it needs to last. If you don’t know the value of your retirement savings when you’re ready to tap into them, you’re gambling, pure and simple.

In his book, Predictably Irrational, behavioral economist Dan Ariely explains how we human investors typically forget about our losses and mentally exaggerate our successes. (You’ve gotta love the name of Ariely’s institute — The Center for Advanced Hindsights.)

So, let’s pause for a stock market reality check.
Most people saw their investment accounts plunge by 50 percent or more when the dot-com bubble burst. Many investors had moved their money into NASDAQ technology stocks, which plunged 78 percent between March 2000 and October 2002.
Investors who diversified beyond tech stocks didn’t fare much better. The S&P 500 lost 49 percent in that same period.
After the S&P 500 peaked in October 2007, it proceeded to lose 57 percent by March 2009.
That’s two heart-stopping losses we’ve experienced — just since the year 2000. But it’s even worse than that for most of us. Since 1994, DALBAR, Inc., the leading independent, unbiased investment performance rating firm, has studied the actual long-term results investors get in the market. The DALBAR 2016 Quantitative Analysis of Investor Behavior includes some truly shocking findings. Consider that over the last 30 years:

Investors in equity mutual funds have averaged 3.66 percent per year — beating inflation by only 1 percent! (Was that worth the sleepless nights?)
Asset allocation fund investors earned only 1.65 percent per year — which didn’t even come close to beating inflation.
Pity those who invested in fixed-income funds — they averaged only 0.59 percent per year.

Clearly most investors, including millions of small business owners, have been digging themselves into a hole they may never be able to climb out of.

Despite the big lie Wall Street tries to sell us, you don’t have to risk your money to grow a sizeable nest egg. There are safe, predictable savings methods used by hundreds of thousands of Americans that can help small business owners take control of their financial futures and act as their own sources of financing.

Some Reasons Why You Need to Take Advantage of Influencer Marketing

Influencer marketing is one of the hottest, and effective, ways to get your brand in front of a massive targeted audience. Why? Because it works, and works extremely well. My agency has been in the influencer marketing game since long before it was a buzzword, and it’s become such a large business that we launched a second agency, blerrp, as a stand-alone influencer marketing brand.

It allows brands to connect with their audience in a more organic way, when compared to traditional forms of digital advertising. There are still some CMOs and executives that aren’t on board yet, so I want to highlight five reasons why influencer marketing is something that, without a doubt, needs to be part of your marketing strategy.

1. Traditional ads are becoming ineffective.
Consumers are becoming immune to traditional ads online. Years ago, every publisher ran the same layout — a banner ad in the header and then multiple ads units in the right-hand sidebar. Even when placed in other locations, they are still easily identified.

Advertisements stick out like a sore thumb these days and consumers are now using software to flat-out prevent ads from being displayed, with 26 percent of desktop users and 15 percent of mobile consumers using blockers to remove ads from publishers’ websites. So, even if you come up with a great ad and experience decent conversion rates, if users have ad blockers enabled they will never encounter your offer.

2. Brands are spending more on influencer marketing.
An astonishing 59 percent of marketers will increase influencer marketing budgets in 2016, further proving how effective it is. While the early adapters have already experienced first-hand how effective it can be, new brands are getting involved every day.

While my agency works with larger brands on large-scale influencer campaigns, we have received numerous inquiries from smaller brands to even mom and pop stores wanting to learn more about this latest marketing phenomenon. Figure out how to make influencer marketing work before your competition does.

3. It’s native.
It’s no secret that native advertising tends to perform better than traditional ads. But influencer marketing is a different beast, because it’s a familiar face that’s presenting the content. With 92 percent of consumers trusting recommendations from individuals — even if they don’t know them — over brands, it’s no wonder why influencer marketing is so effective.

When you combine an attractive offer with a perfectly-matched influencer, the engagement rates can be through the roof, as well as the end result, which brings us to the

4. The ROI generated can be amazing.
According to a case study by Nielsen Catalina Solutions and TapInfluence, influencer content generates ROI that is 11 times greater than traditional digital campaigns. There is plenty of data available that proves how effective it can be, including a study that showed influencer campaigns earn $6.85 for every $1.00 spent. These are solid statistics.

Will it work for every single business under the sun? No — nothing has a 100 percent success rate. But, there is enough information out there that suggests influencer marketing is something every brand should at least explore.

5. Your offer is placed where your target audience is most-active.
Influencers are used to place your offer in front of your target audience in the most active environment — social media. With 74 percent of consumers using social media to make purchase decisions, finding the right combination of offer and influencer can be very rewarding, conversion-wise.

Anyone running paid social media ads on Facebook and Instagram can most likely already attest to the effectiveness of social media advertising. Now, take that success and magnify it, due to the “ads” being more natural and organic.

Information About 5 Things Sailing Around the World Has In Common With Startup Life

About two years ago, my wife and I decided to exchange our stable home in Switzerland for a small sailing boat in order to sail around the world. As you can imagine, this was not an easy decision to make. Our children said goodbye to their friends, to 95 percent of their toys, to their cozy bedroom and to their familiar playground. My wife and I locked the doors to our home for the last time, hopped into the rental mini-van that contained all of our belongings, fetched the kids from daycare, and then drove to our boat — the “Maya” located in the south of France — to begin our once-in-a-lifetime journey.

Since the day we set sail, I have started a new company, which has had a very successful launch recently. To be precise, this is my second company. I am working and communicating with my team members — situated in different parts of the world including Switzerland, Finland, Mauritius and Portugal — while sailing, on anchor or when in a marina. Just recently, we crossed the Panama Canal into Costa Rica on the Pacific side. Then we set sail to Galapagos, and from there, we’ll head to the island paradise in the south Pacific.

Not many entrepreneurs can say that they launched a company while on the open sea. Perhaps I’m the only one, or maybe one of the first? Through this whole process of sailing with my family and starting a business at the same time, it occurred to me that there are indeed lessons from sailing that also apply to startups. In this article, I’ll address five sailing essentials and their respective counterparts in the startup world.

1. Sturdy boat.
This part might seem the most obvious, but having a sturdy boat in sailing is like having a strong team. When building a company, how does one ensure that the team they put in place is going to be strong enough to endure the challenges, as well as enjoy and appreciate the good times? Ideally, I’d like to meet candidates in person, but I put faith in screening candidates multiple times via video conferencing until I am sure of the hiring decision. I made three hires while I was on anchor. (I’ll highlight my sailing path in the conclusion.)

I believe in recruiting worldwide. This allows us to meet the best people wherever they feel home. It also allows for 24/7 customer support with a tiny team. Therefore, I am a big believer of distributed teams.

2. Compass and stars.
As most of our charts are on the iPhone — and we’ve lost that in the water already twice. I no longer carry the phone on deck for navigation. This means that we went back to traditional navigation — studying where to go, writing down directions and distances and using the compass for navigation. Only rarely do we check with the electronic chart on the iPhone, which has to stay inside the cabin while on the water. The compass and even the stars have thus been an important part for navigation for us. They have helped sailors throughout history steer in the direction they want to go, and help them stay on course. My compass is super helpful and always a valuable and trustworthy guide.

In the business world, choosing the right problem to solve is equivalent to having a trustworthy compass. As such, I can’t stress enough the importance of picking a problem worth solving when building a business from the ground up. This helps you plot the right course and stay on course once you’ve set off. Check with your customers often if the solution you believe you are providing is still the right one. Your customers are your nautical charts, which is stressed by Y Combinator’s co-founder Paul Graham.
3. Communication.
Communication is key, wherever you are. And when you’re sailing, you want to have the best communication tools available. We have the following communication tools:

Four iPhones for redundancy when one or two or three fail. We use electronic charts on the iPhone for navigation on top of paper charts, compass and stars.

One Android phone to have a constant phone number.

One Satellite phone, marine VHF radio, and shortwave SSB Ham radio.

A pactor modem for sending emails via shortwave radio. The satellite phone and the pactor modem are most important for weather reports on high sea.

When it comes to the business world, especially when looking at the new company that I started, the team is using HipChat and Trello. HipChat allows us to synchronize on a daily basis. Everybody writes what they were doing during the day and what is planned next. This, for me, is the most important tool. Time difference and the lack of face-to-face contact during lunch or coffee breaks make this the most important source of information on what everybody is doing.

Let’s not forget the importance of communication in general among crew members. In this case, my family and me as the captain and my wife as the capitana. It’s important that everyone is on the same page, particularly when the seas get rough. The same holds true in business. You have to be able to have an open dialogue among the team in good times and bad, in order to move the company forward.

4. Being honest to everybody, including yourself.
This is one of the most important lessons I have learned in life. It is extremely important to be honest with yourself and others. Always speak the truth without judgment, whatever it costs. It is not always easy, but it pays off in the long run. For example, when sailing, I need to sail to a destination where I will stay a day due to a meeting or whatever reason. But, I don’t feel like doing it because the weather might be tricky. Being honest to oneself is very important. I could ignore the feeling and just tell myself to carry on. However, this can be fatal. In business, it’s the same way.

Being honest with others gives respect. When we arrived in Curacao, we had some troubles with the boat — and we had kids in tow. We didn’t have time to go to customs to check in, but we did go two days later. When they asked us when we arrived, we could have lied and said that we just got there. Nobody would ever find out. But, I didn’t want to lie, so I told them the truth. They were not happy, but in the end, they told me that they appreciated my honesty. This builds trust, and this is the basis for everything great.

5. Troubleshooting.
Mishaps will happen in life, whether in your personal or professional world. I can’t tell you how many times during our sailing adventure problems or situations would rear their ugly heads. The latest misadventure was having to replace the toilet seat on the boat. We were in Costa Rica and it’s not like a replacement toilet seat can be easily found at the local Home Depot. So we used some ingenuity and asked a local repairman to create a piece out of some material collected from the trash bin. He turned it into a replacement part, and it worked.
In a startup, you often need to prepare for the worst. You also need to trust in your team to come up with solutions when problems arise. For example, our marketing director learned to how to code rails and html. When we needed a video, we just made one ourselves for less than $500.

Being able to improvise along the the way is the difference between success and failure — or at sea, it could mean life or death. Having that ability to troubleshoot and find solutions to problems is a critical skill set to have as a sailor and as an entrepreneur.

In closing, life on a boat truly is like life in a startup — unpredictable. There is always something unforeseen happening. Wind changes, something breaks, lack of electricity. No more wind is like changes in the stock market, customer preferences or launch delays. The key is to realize that every day is different, but it also offers an opportunity to do something new — a chance to come up with a new win. In startup life, not a single day is predictable and every moment is very unique.

Therefore, my take away is that entrepreneurs should never have to worry for anything, ever. As the Buddhist saying goes, “If you have a problem that can be fixed, then there is no use in worrying. If you have a problem that cannot be fixed, then there is no use in worrying.” So why worry.