Emergency Strategies for Retirement

There's still time to make your retirement happy.

Is your retirement looking as happy as you planned?

I stumbled upon this interesting article, You Can Still Retire Even If You’ve Saved Nothing, posted on the Bottom Line Personal in June. It is a topic many baby boomers are unfortunately being faced with: RETIREMENT. Of course we would all like to think of retirement as a time to relax and enjoy the fruits of our labor, but due to the economic climate we understand that dream or idea appears to have become less obtainable as time passes. The article itself is geared towards a population that, to quote the article, “haven’t saved a dime” for retirement, but I believe this article relates to a larger demographic who have been affected by layoffs, high unemployment percentages, or any other financial hardship that has caused a significant decrease or depletion of their bank and retirement accounts.

So if you have little to no money saved for retirement, there are some emergency strategies that you can start now to prepare.

The first thing to consider would be the Tax Code Catch-up provision, which allows individuals 50 years of age and older to increase their 401K and retirement savings plans contributions.

The second course of action would be to establish a new budgetary process and spend differently. Yes, it can be difficult to refrain from continuing bad habits, but starting a path of healthy financial decisions today can have a lifelong effect.

Lastly, and perhaps most difficult, would be a change in your expectations or adjusting your idea of retirement, including where you’ll retire. You may have to decide to retire later than expected, enjoy retirement in a state without a high cost of living, and change your plans of what you’ll be doing in retirement.

Simply put, you can still make decisions today that will help you afford a comfortable retirement tomorrow.



Cramer: The Stronger the Brand, the More Pricing Power a Company Has

My morning routine includes turning on the TV and listening more than watching CNBC’s Squawk Box as I get ready for work. This morning, as I passed by the TV in the sun room, I saw a news graphic that stated, “Cramer: The Stronger the Brand, the More Pricing Power a Company Has – And That’s Important.” (It is possible that I was replaying a recorded episode of Mad Money this morning, but that isn’t important to my point.)

Small businesses tend to not think in terms of "brand power", but they should.

Small businesses tend to not think in terms of “brand power”, but they should.

Thirty minutes later while driving to work, the message of this particular graphic kicked in and I pondered its declaration. It was the phrase “pricing power” that first attracted my attention, but after a bit of thinking, someplace around the Coke plant on Phoenix, I realized the importance of “the stronger the brand” part of the statement.

In case you don’t know who Jim Cramer is, he hosts a show on CNBC called Mad Money where he talks about the current day’s stock market activity, then offers his thoughts on which publically traded companies might be worthy of his viewers investment.

Cramer explained that a company’s “brand equity” gives a company the ability to charge more than their competitors because their brand stands out from their competition and the people that need their product or service know their name. Part of the reason people know their name is that they have spent large sums of money advertising their brand over long periods of time, providing their customer with a value perceived greater than the price they pay for the product or service. The difficulty for some small businesses is that they are operating most days on resourcefulness because of the scarcity of their own resources. They don’t have loads of money to spend on advertising. So is it possible for a small or privately held business to build their own brand equity creating future pricing power?

Let’s define brand equity in the simplest of terms. Brand equity is created when a business has been successful in presenting their products or services to their target market so that the market remembers their name, their customers are serviced, satisfied, and believe they are receiving a great value for their money spent, and they trust the business to deliver on their promises. Hopefully your business is already doing this for your customers. But just in case, let me offer a few tips for accelerating the increase in your company’s brand equity.

Quit being modest, but don’t lie. Many people have been taught by their parents and teachers that it is rude to brag on themselves. That is generally true. However, people won’t think you are rude for bragging on your product, service or employees. Don’t confuse the two. Also, if you believe in your company, make it a main topic of your conversation in social settings, when you get your oil changed, or when watching your nephew’s football game. Just make sure you know when you’ve made your point to those people you converse with. Keep in mind that the more people who know the name of your business and the more people that are familiar with your product or service, then the more likely they are to become a customer. And bragging doesn’t cost much money.

It is your responsibility to educate your customer about your product or service and its value to them. Who knows more about the value of your product or service and its features and benefits than you? When working with your customers take the time to inform them about both the obvious and the less obvious benefits your product or service provides. When people understand the real story of your product or service, the probability will increase that they will perceive the price your charge as a great value.

Always try to make it better. Having a superior product or service is what wows your customers. That doesn’t mean your product has to be the Royals Royce of the in the industry. A Honda can wow a buyer because of its quality workmanship, reliability, and affordability. Honda has wowed me since the 1980’s when I bought my first Honda, a Honda Civic. But the Honda Civic in 1985 has evolved into a much better Honda Civic in 2014. You will build your own brand equity by continually improving your business offerings.

Brand equity is important to any business. Large companies have full time professionals to focus on building their brand equity. Smaller companies don’t. But a small company with passion focused on providing its customers excellence and value, with owners and employees that are willing to brag about their capabilities, don’t need a full time professional to build brand equity. Isn’t it time you let your target market know who you are and the reason they should buy from you?




Why Businesses Succeed (or Fail!)

The hearts of entrepreneurs are normally filled with optimism, faith in their idea and plan for the business, and above all, confidence. One would think that if a person set out to start any sort of business, and had such attitudes, their chances for success would be excellent.

However, information supplied by the Small Business Administration (SBA) Office of Advocacy in March 2014 indicate the about 10 to 12 percent of firms with employees open each year, and about 10 to 12 percent close. They go on to report that about half of all new establishments survive five years or more and about one-third survive for 10 years or more, that (as one would expect) the probability of survival increases with time, and that these statistics alter little over time.

Why the failures? It would be natural to think that here in America, with all the entrepreneurial spirit which built the country and made it great, failure would be rare.

Early in my career, someone told me that “most new businesses fail for one or both of two major reasons: (1) the owner doesn’t know what he is doing, and/or (2) the business was begun with insufficient capital.” It is clear that it would take a lot of luck to overcome either of these situations.

There are many other reasons a new business may not have a very long lifespan. Chief among these would be lack of accurate, current financial information. Often, if there is any financial data, the business owner may have little if any understanding or assistance in understanding what it means.

It is at this point that a CPA can be of great help to the would-be entrepreneur. The CPA can discuss these and other issues when the business is still in the planning stages. Having advice and counsel from someone who has seen many businesses succeed, and also invariably seen some fail, can set the new business owner on the right path toward success, and avoid the disappointment of failure.