Demystified Blog Archive #40 - Mind Your Own Business (Part III)

The city of San Diego has a $6.25 billion shortfall on obligations promised to current and retired employees.

The State of New Jersey has $90 billion in unfunded pension liabilities.

And of course, Social Security and Medicare has unfunded baby boomer liabilities totaling over one hundred trillion of dollars ($100,000,000,000,000).

The situation isn’t any different in Europe.

Spain’s Social Security Reserve Fund has been heavily invested in Spanish government bonds for several years with an average yield of NEGATIVE 0.19%.

Yes, you read that correctly.

Unsurprisingly, Spain’s pension fund is almost fully depleted.

The United Kingdom has trillions of pounds worth of unfunded public pensions.

Even conservative Switzerland has a public pension that’s only 69% funded – a seemingly fantastic number by today’s dismal standards.

Last year, the Swiss government proposed a plan to save its pensions, asking to increase the retirement age for women by one year (from 64 to 65, the same as men), and increase VAT by 0.3%.

But the plan was rejected by Swiss voters in a national referendum, the third time in 20 years that pension reform failed to pass.

Pension plans are almost universally toast.

Most of the time, politicians just ignore the problem and try to kick the can down the road to the next administration.

As rational human beings, we don’t ignore such heartfelt data.

Take action. Mind your own business.

Up to this point we have spoken about the mindset of the entrepreneur and a quick way to pencil your break-even point.

Now we will talk about the actual planning, which is equally important.

Let’s begin with a business plan.

Your business plan is just a one-time event, it establishes the vision of the company. In fact, a sharp business plan is what the SBA (The U.S. Small Business Administration) and lending institutions will require before you are granted a small business loan. The purpose of the business plan is to identify an executive summary, market analysis, organization and management, marketing and sales strategies, service and product mix, vendor, break-even analysis, and future projections, etc.

If you go to the SBA website you fill out a comprehensive business plan for free. It doesn’t need to be extravagant, just an overall, 30,000 foot view of the company.

Secondly, you will want to create a strategic plan.

A strategic plan is used for weekly, monthly, and annual goal setting and the tasks that need to be performed to reach these goals. This is essentially your short-term road map for benchmarking your long-term business plan, and it should evolve as the company grows.

Lastly, you will want to create a marketing plan.

A marketing plan will help you establish your niche, define your target customer, build your plan, detail when, where, and how, and track where your customers are coming from. This plan should identify the internal procedures, public relations, technology, printing and signage, strategic partnerships, media, etc. that will be required to strategically execute the marketing function of your business.

When these 3 plans are working in harmony, we have given ourselves a solid foundation to strategically move our business forward, and reap the benefits of living the American dream.

Of course, there is always additional information you should consider when starting a business. And, you should always be working with a team of professionals to help mitigate the risk of any investment.

To your investment freedom