Archives for November 2015

Hiring the right person for the job is critical in achieving the goals of your company. For high-growth companies that have ambitious goals, not all people are right for the job. Workers that may be great in a normal company with normal expectations, are not cut out for the fast pace world of high-growth companies. To find the right person, there are specific traits that make better hires.

The first trait to look for is someone who can do more with less. These people will take a small idea and create something big with it. They approach growth and information with an attitude of growth and innovation. They have the wherewithal to start their own business and enough drive behind them to make you small company expand.

The second trait is fortitude. These people do not give up when there are setbacks. They keep going and preserve through tough times. The find ways to reassess and reroute to achieve their goals. They are reliable and can keep up with the changes in a fast-growing company.

People with self-awareness, understanding their strengths and weaknesses are valuable to have to any company. They will know what is expected from their job and know what their most valuable contribution will be to the company. They put their knowledge and experience to work for the company.

Find someone who has an aversion to interruptions. This person will be productive and accomplish more for the company. The business world is full of interruptions, so finding someone who will buckle down for extended periods to accomplish their job will create an asset for you company.

The last trait that you look for in employees is a drive to be better. People that have a thirst for accomplishing something will strive to work harder and longer for your company. They have something to prove, have relentless optimization, and work faster.

When you hire employees with these traits you will find your company on the fast pace to your goals. The employees will drive your company to greater heights and achievement will be amazing.

You have a successful business, and there is this pretty piece of land across town. Business is booming for you in your current location. What would a second location do? Would it be profitable? Is it the right time? Expanding your business can be exciting, but how do you know that you are ready? The following are a few ways to determine if your company is ready to expand:

1. 1.       Assess the health of your company. This may sound like an obvious step, but it is important to know how healthy your business is before you try expanding to another location. There are several key components to consider before expansion can take place.
   1. The first being your management team and operational systems; each should be clearly defined and operating well before considering a new location. You are no longer the only person in charge of the business, and are willing to let go of the reigns to well-trained, qualified managers and staff.
   2. The second part is profits. Profits should have increased and flourished to cover more than just monthly expenses. You should have sustained, consistent monthly, quarterly, and yearly profits before expanding to a new location.
   3. The third part is product and services. The product and services you provide should be well tested and effective. Your brand should gain credibility and recognition in your current location so the reputation continues to grow with the second location as it does with the first.
   4. 2.       How will the new location be managed? You cannot spend enough time on this question. The key to success is training and management. Many times, it is impossible to split your time evenly between the locations. You need to know how the older location will function without you present for a large majority of the time. If you have to put all your energy into the new location, and the older location is not established to run like a well-oiled machine, then you run the risk of losing that location along with the new location.
   5. 3.       How will the locations be linked? To determine this it is important to consult a financial advisor  to help understand the relationship. Will it be a separate entity? Will it be a subsidiary of the first company? What are the tax implications? What are your goals for the location? Will it be a franchise or will it be owner-operated?
   6. 4.       How much capital do you need? Starting a new location is exactly like starting a new business. You need capital, lots or capital. Do a comprehensive analysis of the financial investment required for expansion. If your first location is profitable, then financial institutions and investors are more willing to take a chance with the new business. Remember to take into account cash flow. You will always need more money than you plan.
   7. 5.        Have someone that knows leasing issues. Negotiating the lease for a new location is critical when planning a new location. The location needs to fit the product or service you are selling, the rent needs to be reasonable. You need to be able to generate enough profit to cover the expenses of the new location. Do not expect the first location to cover the expenses for the new location.
   8. 6.       Does you brand have a trademark? Once the research is in, and it looks like a good idea to expand, than you need to look at trademarking your business assets. The intellectual property, such as brands, taglines, patents, and copyrights, are important assets to your business. Take the time to protect and strengthen your business by taking care of what is yours.

Once again, retirement is in the spotlight this month. Most of us save for retirement for several decades, and it becomes one of the biggest investments in our lives. The problem is your priorities change as you age, and what your goals were when you started your retirement account is not necessarily the same goals you have now. Now is the best time to review your retirement portfolio to make sure your goals still align with where you want to be.

The first step in ensuring your retirement is everything you planned it to be, is review your portfolio. As you approach retirement, your portfolio should become more conservative. This does not mean a less diverse portfolio, but exposing your portfolio to more conservative types of assets. Thanks to modern medicine, we are living longer, so that means retirement could last several decades and it is important to plan accordingly. When you look over your portfolio determine how many short term (0-3 years), medium term (3-10 years), and long term (10 + years) investments you have. Have a good balance of investment lengths.

The next step in ensuring your retirement goes smoothly is to create a financial plan. If you have not already created a financial plan for retirement, you will need to consider the following:

• Withdrawal rate: The average withdrawal rate for retirement is 4%. There is a 35% chance that your portfolio will last 30 years if you average a 4% withdrawal, but you need to include all pensions, social security, and any other tax-deferred, tax-free, or taxable accounts. Your strategy you use to withdraw from your portfolio will determine how long your money will last into retirement.
• Insurance: Medical insurance changes when you retire. You will need to switch to Medicare and possibly enroll in a supplement insurance policy. This is also a good time to figure out long-term care insurance.
• Estate Planning: You estate can look very different when you have grown children and grandchildren then what it was when you began your estate planning. Your documents need to reflect how your life has changed including new marriages, births, death, and any charitable donations or specific bequests.

The third part of getting ready for retirement is to examine your lifestyle. We all know diet and exercise is an important part of aging well. Keeping a positive attitude has shown in medical studies that individuals experience fewer health problems and have a lower risk of dying then those with pessimistic attitudes. Now that you are retired instead of using you 40 hours a week for work, you have the opportunity to travel, volunteer, and become more involved in your community. Retirement also allows you to set new goals. Now that you have retired, your goals can focus on what you want to accomplish in the next few years, such as run a 5K or travel the US. Whatever your new goals are, write them down and plan how you will achieve it.

In October, the IRS announced its changes for the annual inflations adjustments. The adjustments were made to over 50 tax provisions for 2016 and include the tax rate schedules. The following are a few of the highlights if the changes for the 2016 tax year:

• Participants with self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is at least $2,250 but no more than $3,350. This is up from $2,200 and $3,300, respectively. The out-of-pocket expenses remain the same for the 2016 year.
• For the joint filers, the AGI amount has increased from $110,000 to $111,000 to determine the reduction in the Lifetime Learning Credit.
• Foreign income exclusion has changed to $101,300, up from $100,800.
• Descendants who inherit in 2016 have a basic exclusion of $5.45 million, instead of $5.43 million.
• 401(k) contribution limit will remain the same at $18,000, and general pension plan limitations will not change. The cost-of-living index did not meet the necessary statutory thresholds to initiate any adjustment.
• The standard deduction for heads of household raises to $9,300 while the other standard deductions remain the same, which is $6,300 for singles and married filing separately, and $12,600 for married filing jointly.
• Limitation for itemized deductions begins at $259,400 for individuals and $311,300 for married filing jointly.
• The personal exemptions raised to $4,050; however, the exemption is subjected to a phase-out beginning when adjusted income is $259,400 for singles ($311,300 for married filing jointly) and is completely phased-out at $381,900 for singles ($433,00 for married filing jointly).
• The Alternative Minimum Tax exemption is $53,900 and begins phase-out at $119,700 (83,800 for married filing jointly with exemptions beginning to phase-out at $159,700). The 28% tax rate applies to taxpayers with taxable income above $186,300 ($93,150 for married individuals filing separately).
• The maximum Earned Income credit amount is $6,269 for married filing jointly and have 3 or more qualifying children.
• The monthly limitations for qualified transportation fringe benefits remains at $130 for transportation, but increases to $225 for qualified parking.