Ep. 27 Create Your Exit Strategy to Avoid Working Forever

Don’t want to work forever?

This week Elizabeth welcomes Bill Losey, author of “Retire in a Weekend,” discusses strategies for retiring faster than you that imagined — and that might even be right now.

Elizabeth also shares tips on creating the exit plan for your small business, and her success tip of the week, “Know What You Want.”

Right click to download the .mp3 file.

Transcript:

Elizabeth Potts Weinstein: Welcome everyone. This is Elizabeth Potts Weinstein, your host for “The Wealth Spa Radio Show” and this week we have a couple of different things going on. First, I’m going to have a guest, Bill Losey who’s the author of “Retire in a Weekend” then we’ll be talking about creating the exit strategy for your business - maybe you’re not ready to actually do the actual exit strategy yet but let me give you some tips and things that you can do now that will set you up for whenever you are ready. And then as we get close to the top of the hour, I’ll be sharing with you my entrepreneur success tip for the week which is “Know   what you want”. Now, before we get in with Bill, I did want to let you know that I finally get the podcasting stuff all set up for the radio show. So if you forget to come on the Voice America Business Channel and listen every week, you can actually get this radio show delivered to you by email or if you’re in the podcasting you subscribe to it to have it automatically download. It will also be on iTunes soon, I’ll let you know about that. Hopefully by next week, we’ll get to the cue as Ad Apple know, have it on up there. So if you would like to subscribe to the show and have it delivered to you automatically, if you don’t have to remember, you can go to the website TheWealthSpaRadioShow.com. That’s TheWealthSpaRadioShow.com and you can subscribe by email or by podcast delivery. All right, so let’s get back to our stuff for today. On the line with us today is Bill Losey who is the author of “Retire in a Weekend” the baby boomers guide to making work optional. So, thanks for being on the call today.

Bill Losey: That was my pleasure Elizabeth. Thanks for having me.

Elizabeth: Oh yeah! So I actually got - Bill sent me his books - it was a greatest - I’ve known Bill for a while so it was great to see his book and actually have it in his hand [laughs] and so, while we’re talking a bit about the idea of this “Retire in a Weekend” because it sounds like a really catchy, sexy title but is that what you exactly mean? [Laughs]

Bill: What happen is when I was doing a research for the book, I actually interviewed a few hundred people who had attended some recent retirement and investment workshops. I also surveyed my existing client base and then I surveyed more than 5,000 people who get my own - a newsletter called “Retirement Intelligence” and I basically really wanted to find out what their biggest retirement concerns were and what’s their most popular questions were and that’s what the book really addresses but when it came to the title, what I found out was when I was, again, doing my research asking people about their personal finance books, they say, “You know, most of these books are 3 - 400 pages long, they’re really, really dry; they’re really, really boring and they’re filled with jargon so like okay, you know what, “Retire in a Weekend” is boring because I’m going to make this book really short, simple, easy to understand, laced it with humor and frankly, if you read it from cover to cover, you can probably read it in about two hours and I really recommend that people read it over the course of a weekend and by the time they’re done, they’ll have those five days concerns addressed and they’re tend to get questions answered. And sure enough, that they would really be able to know whether or not they should be able to afford to retire.

Elizabeth: Yes. Funny one - I was looking at your book, it actually is very similar to how my book is and that is departure from the jargony, super technical kind of lighting. It’s very, very easy to read and kind of casual yet has load information.

Bill: I did that on purpose too because in the vast majority of the clients that I serve a little bit are women. And women and/or couples, in a lot of the situations when a couple comes in, I’m dealing with people primarily between that ages of 50 and 70 and a lot of those cases, it’s still the man who is making all the financial decisions and in a lot of those cases, the wives really don’t have an act for this finance stuff. So, I really wanted to make the book simple and easy to understand for them and hoping that they would also pass it on their husbands and other people.

Elizabeth: So, what is really the biggest message of the book that you want people to get from reading it?

Bill: I think the biggest message from the book that I want people to get is the fact that if they want to - they truly can retire today and the fact is, just based upon - the book is only been out for 60 days but based upon feedback that we’re getting, it’s really appealing to two different audiences. It’s appealing to the, personally I would say that baby boomer that’s kind of 55 to 62 that really wants to hang up work - get away from it and walk away all together in a traditional thing, but in the other side of the coin, there are people perhaps - that in the storm in that 50 demographically, when people at their 40s and 30s that are just not happy with what it is that they’re doing, so for me, I really define retirement as making work optional, so, there are a lot of introspective questions that I asked in the book because my feeling and my personal feeling is just that it is people who truly love what it is that they’re doing, work is not work; work is play. So the fact of the matter is you love what you do and you’re passionate about what you’re doing, you’ll never work a day in your life and in essence, you are typically retired.

Elizabeth: I’m not really doing much personal financial planning anymore but over the years when I was doing it, it was really amazing to me how people come and say, “I need to have a million dollars to retire.” They have this magic numbers that they (overlay) and it really comes down to -it’s so case to case and how much you actually need in a month. We come to ask you how much you need in a particular month to support that lifestyle that you want which really vary among people.

Bill: Well, the ten most popular questions that I could ask [06:08] I’ll give you a couple right now but one of the biggest questions is “How much money do I need to retire” and it depends. So I take socially security at 62 - it depends and how much money can I take out and it depends. It really depends upon your situation but I know exactly what you’re saying because the popular media especially has sort of become fixated on this. You have to be a millionaire or you have to be a multi-millionaire in order to retire and I’m constantly telling people that accumulating a seven figure portfolio is really a goal for a lot of baby boomers but it isn’t the end all deal, I mean, at the end of the day, it really depends upon the kind of lifestyle that you desire and this book, frankly, it’s for people that are sick and tired - so you need to be a multi-millionaire in order tor retire, because you don’t need them. I’ll give you a great example; I have one client  who is a very successful doctor, actually both he and his wife are both doctors, they probably generate close to half a million dollars per year in revenue and they have a multi-million dollar portfolio but hey also have a multi-million dollar lifestyle. They have houses on the East Coast and the West Coast, they’ve got expensive cars and both of these people are going to work as long they can in order to sort of maintain that lifestyle. They really can’t - they’re not willing to make that lifestyle choice and downsize and simplify. Conversely, I have a woman who has never made more than 50,000 dollars per year; she has about 300,000 dollars in her portfolio and she is extremely frugal. She doesn’t even own a TV, she has a hand crane cradial, I mean, she doesn’t have a landline telephone, so in her situation, she’s a miser and she can afford to retire on what she have and with a really, really nice lifestyle on what she have. So at the end of the day, it’s really going to boil down to the type of lifestyle that you have and really it should be able to control your expenses.

Elizabeth: And I find that with a lot of the people it’s - what I was doing as a financial planner I was saying, “Here are the options. It’s up to you to decide” you know, are you willing to say, “I don’t want to work and I’m going to live with this lifestyle” or “I’m willing to keep working and accept I want to live this higher lifestyle”

Bill: Well, one of the funny things that I find is that, when I have this sort of heart to heart conversations with people oftentimes they want me to make the decision for them. And I do the exact same thing; when I sit down with a new person, we take an inventory of where they are, we have all sorts of introspections and goal settings to figure out exactly where they want to be and they all come back and I’ll say, “Okay, here’s option A, here’s option B, here’s option C and by the way, did you think of D, E, and F?” And then, “what do you like of all these options”, you know, “Here’s the pros and cons, here are the costs, here are the decisions that you have to make” and you know, which one’s feel right. And often times, it’s great for us to be able to collaborate together because certainly they know the situation better than I do but if they’ll be able to say, “Hey, I like this information from A, I like this information from B, this from D really floats my boat and can we repackage that from hell?” and in many cases, we actually come back with a strategy that’s different from anything that I ever recommended.

Elizabeth: One thing I always - was it wasn’t just for me when I was doing it for people was - since then I was coming with what I thought was bad news that they thought was great, [laughter] I come and say, “Okay, if you quit your job today…” There was one guy who - he actually came with a bunch of money from a stock - from a start up company and so he was young in late 30s, but has a whole bunch money and he’s like, “What if quit today and then go do anything else” you know, it’s like I pointed it out, and I was like, “So, this is what I’m thinking would be your month for your mouth” and he’s like, “Okay, I’m going to go - I’m actually going to go move to New Zealand and then buy this boat and I’m going to live on a boat” and I’m like, “Okay” [laughter]. But I think you’re going to be a little of this miser for a good long time here, young enough you could always work more - go back if you wanted to but it’s interesting that it’s not a certain amount of money for everybody really does depend on the lifestyle that you choose.

Bill: It depends upon the lifestyle and one of the things that I’ve found, as I’ve been getting older, I’ve been in this business for about close to two decades and this business is really about emotions and psychology more than it is money. And as you can help people to get a grasp of their emotions and to really understand what is the truly important, I mean    , that’s where we’re really doing a good job because at the end of the day, money is just black, white and green. It’s just a tool that helps you to get what you want so I think it’s more valuable for us to be able to help people not just to figure out what it is they truly want to do and then give them different options and strategies because what I found is that most people do not know what it is they want to do. They can give me a laundry list of all the things that they know that they don’t want to do but it’s very, very rough to truly figure it out and I think a lot of it have to do with peer pressure and also family pressure because a lot of people have sort of shell those dreams that they had when they were 18, 19, 20, 21 and got into a career perhaps that wasn’t like for them because mommy or daddy said that this is the way to go or you know perhaps they got married young and they already bought a house or have some kids and you know, grew up really, really fast. So at least the people that I’m saying that are typically are in their 50s, I mean, I’m out to point now whether they have the financial resources both the income and the assets and say, “Hey, you know what, I want to make some choices, I want to make some changes and I want to reconnect to those passions again” and that I think, probably one of the most exciting things because a lot of people that I’m seeing don’t necessarily want to retire in a traditional event; they just know they don’t want to wake up on Monday morning to the alarm clock, it’s 6 o’clock and go to bath and go to job they’ve been going to for the past two or three decades.

Elizabeth: Sometimes some people say to me, “When do you want to retire” I actually say when I’m already dead. (Overlay)

Bill: Yeah, I say the exact same thing like what are you talking like you’re only nearly 40, I’m like you know, but for me, because I control my own schedule, I’m probably putting in more hours now than I ever did when I was a W2 employee, you know, with other businesses, but I’m working a little sort of crazy hours. Some days I wake up and I work form eight to noon and then I don’t go back to work until 8 o’clock at night. Some days I might do 14, 15 hours straight, sometimes I’ll take two or three days in a row and not do anything, I mean, it’s basically, I mean, as long as I have access to a computer and email, I can work anywhere I want to work. And I have one client that retired about a year ago or so ago, and I was talking to him about retirement he says, “Oh, l love it. You know Bill…” he goes, “everyday seems like a Saturday” and I said, “You know what, I love that. I’m gong to use that slogan.”

Elizabeth: I found that - for sure for me, is that I forget what day it is all the time because I don’t design my life as the five business days and a two weekend days.

Bill: Yes.

Elizabeth: Yeah, I think that’s part of retirement isn’t necessarily mean you quit a job; you never work again. And actually the great about a structured retirement make it more affordable so you can live a great lifestyle is you quit that, maybe, day job if you think it’s an [13:00] and then you still have business or some part time work or something but…

Bill: Absolutely.

Elizabeth: You know, it’s something that you choose. All right, so we’re about ready to go to our next break and then after the break, we’ll have Bill Losey back on the call with us again to talk more about his book and information about retiring in a weekend. All that after the break.

BREAK

Elizabeth: Welcome back everyone. This is Elizabeth Potts Weinstein, your host for The Wealth Spa Radio Show. And today I have Bill Losey, who is the author of “Retire in a Weekend” the baby boomers guide to making work optional; on the line with me today. So, welcome back after the break Bill?

Bill: It’s a pleasure.

Elizabeth: And so I wonder - wanted to talk about a little bit was about investing and effort allocation and all that stuff. I’ve seen people come to me asking about it - I tend to see a lot of extremes and on one hand after the people who - they try to beat the market and do all the cool things and they’re watching those shows that we all know (overlay) [laughs] and they’re trying to pick the stock, on the other extreme, the person who put all their money on seeding and get paid 5%. So what are the nests of mistakes that people are making with that?

Bill: Well, number one, hardly anybody ever beats the market and frankly, it really drives me crazy when somebody comes in and asks me how my portfolios have compared against the SNP500. And I’m like you know listen, this is just an arbitrated benchmark, I mean, this has no real bearing on you or your future, so why do you even pay attention to this thing at all. So I really tried to line - and basically, I compare my client’s actual performance with whatever their goal is. So if we sit down and project, “Hey, you need 7% per year, over develop a portfolio and try to achieve that” and they’re like, “Okay, do we need the expectation, did we exceed the expectation or we below expectation, do we need to make some changes” but I think the real big thing will have to get an effort allocation is that, there are still so many people out there who believe that trying to prime the market, you know, should I be in; should I be out and/or you know, what’s hot and you know, what’s that tip. Those are the types of things that people, I think, are led to believe, are really the proper way to invest. And I think just like a diet and exercise, I mean, you get really good results over time by doing little things consistently. And frankly, it’s the same thing with investing. So, there are really no magic pills and there really is no magic answer to have to achieve your goals besides give yourself some time and control, I mean, how much can you save and how you can keep your investment cost low. But you know, when it comes to effort allocation, I spent a lot of time in this area with my clients and by effort allocation, for the listeners that might not be up on it, it really refers to how you divide up and apportion your money among the major asset classes like stocks, bonds, and cash. And then after you decided how to do that then you have to dig a little bit deeper and diversify. So now, it’s a matter of how much do we have in the United States versus foreign stocks or bonds, how much do we have in a large capital versus small capital and how much do we have in gross versus value. Those types of things but based upon what I’ve read and what I’ve studied in close to 20 years in this business, according to that research, more than 90% of the return that somebody earned on their money really have to do with how they divide up their assets and it has very little to do with all the in or out of the market and what are they actually invested in. so oftentimes to me, I sit down with people, I’m like, you have to realize that whether or not you achieve your goals, is really going to depend in large part on how you divide up your money. And the ultimate goal for the people I’m seeing here is luxury retirement so I’m like, how soon you retire, the expected rate of return, how much risk you take, how much money you take out, and how long your money lasts are really going to be greatly affected by this one decision so again, a lot of people trying to time the market, trying to take the next hot stock thing and the financial media and some investment companies that may are still really out there perpetuating this myth. One thing I did, this is a story about 10 years ago, I was actually a guest host on a radio talk show in New York, New Jersey and Connecticut and I actually did a study of financial magazines and rating services because typically, once a year, in January or so, you see them publish list of the best (overlay) funds to own now or the five companies you have to own today or the only investment you’ll ever need and it’s really funny because I actually went back and I looked at three or four years worth of those types of things and every issue have something different on it. And then more importantly, if you actually went in and you look at the advertisers during those issues, a lot of the advertisers were the funds and investments on those lists.

Elizabeth: Oh, that’s very interesting!

Bill: It was unbelievable. It was like 70% of the advertisers had investments that were on that hot list. So it’s a very interesting thing.

Elizabeth: Yeah. So, when people coming to you and you really are specializing in people who are kind of in that either retirement or pre-retirement…

Bill: Exactly.

Elizabeth: …baby boomer age. I see a lot of people who think, ‘Okay, I have my portfolio, maybe my form 1K or whatever, it’s got mostly massively investing in stocks or mutual funds that hold stocks and now I’m ready to retire so now I’m supposed to have bonds or something and you know, I’ve found, for me, if people will look at retirement like they retire it all in one day.

Bill: That’s exactly. Yeah. Well, that’s actually one of the myth layers I was talking about retirement myth versus retirement reality and again, the popular media says, “Hey, when you retire, you have to get more defensive.” So my question well, what does defensive mean? Does defensive mean you should be all in cash and bonds? Really, what does that mean because I was talking in this generic terms and of course, for the average consumer who really doesn’t pay attention to stuff, they must think, “Hey, if this TV personality on this TV show or this writer in this national newspaper magazine so well then it must be true.” You know, I’m in conference saying, “Hey, you’ve been the best generic advice - truly for the masses but to address your specific questions, I - this is going back about a year ago, I met with the senior citizen in the mid 70s and the guy was loaded and he had all of his money in the stock market. Now, if you are at any of the magazines, they would basically tell you that, “Hey, you’re retired. You should have probably 40 or 50% of your money in bonds” and here’s the guy who have all of his money in stocks. So at first blush I was like, “Wow, I can’t believe that you have in stocks, I mean, do you have any idea how much risk you’re taking?” He’s like, “Absolutely!” He’s like, “I’ve been in all stocks for the last 50 years” so this is a situation where somebody understands the risk, have been rewarded for this and he wants to keep things the way that they are. Conversely, I had one of my clients, woman in her 50s who had passed away from cancer and her two daughters who were in their early 20s and inherited their mom’s IRA. So now again, if you read the popular media, the media says, “Hey, if you’re young, you have a long term time horizon, you can afford to be ingressive, so you should be probably 90 or 100% in stocks.” Well that’s great in theory but here are two women who didn’t know the difference between a money market account or money market fund, had trouble balancing their checkbook and certainly didn’t understand the stock market or the risk they were taking. So when we first started out working together, they owe me half of their money in the stock market because frankly, that’s all the volatility and fluctuations that they can actually stomach at that time. I mean now, it’s a couple of years later, they’re getting more used to it, they’ve become a little bit more aggressive as they became a little bit more decisive about their long term plan and goals are but everybody’s situation is unique and different just like our fingerprint. And taking this generic advice up to in the media, is a huge mistake.

Elizabeth: Yeah. I think one of the issues too is that - it has to have to be personal because it also is based upon your - not just your tolerance for risk just like a fancy thing that people say but your understanding of it and I have people come in who’s been with somebody else, maybe one of these big brokerage houses and then involve your accounts and trade all over the place, they come in and say, well, I lost 6% on my portfolio last year but if further effort allocation - if they would invest it in some index funds, they actually would have lost 10%. They’re actually better off in it. What if they (overlay) but they really don’t understand what they were doing, that there was volatility in their portfolio and their portfolio was relatively risky and maybe it did better than it could have - this they didn’t understand.

Bill: Yeah. Well, this is one of the most common thing that I see and again because I am working primarily with people in their safety, you know, they’re busy baby boomers who are always on the run and always on the go and it’s really not uncommon for me to sit down and sit somebody who has anywhere from 5 to 15 different accounts, you know, they got their traditional IRAs in the rows from their trust accounts and the joint accounts, custodial accounts, et cetera, and these people, most of them have no idea what they’re invested in, they have no idea how much they are paying in thousands for all those investments, they have no idea how they are compensating their advisers after working with them and they really have no idea if they’re getting good value for what they’re paying. So one of the services that I provide, I mean obviously, is really going through this thoroughly with them but you know, telling them what their effort allocation is quantifying for them as best as I can, you know, what I believe they’re expected in a range of returns is but I think, perhaps the most important thing that I do for people is actually quantify what I think the worst case scenario is on the downside. And once you stay in all that number, then you can sort of back in to what’s an appropriate allocation. It’s like when somebody walks in with a nice diversified portfolio that’s all stocks, domestic and international, large capital and small and medium growth in value, you know I could say, “Hey, with a very high degree of certainty, I think in a worst one-year period, this portfolio might drop by as much as 35 or 40%” and I like, “Oh my gosh! I can’t stomach that kind of fluctuation if I get me - I can only handle maybe a 15% to climb in the portfolio” well, if you think you can only handle that one, you know what, you’re price should not more than only 60% of your portfolio in stocks and the rest in bonds.  So that’s how I back in to people and I think that once they know the information and those in just like the returns and those are quantified then reason that they got a nice foundation to build on from there.

Elizabeth: So, I’m looking at how much time we have - a couple minutes left before the break, so, one more thing before we go to the break, what about social security? Do people usually - they will be factoring it and is it something that is helpful to people, you know, how should we think about it?

Bill: Well, for the people that I’m dealing with now who are in their 50s and 60s, certainly I want to factor them because I don’t think the government is going to make any drastic changes certainly not for people of that age but actually in the book, in “Retire in a Weekend”, I’m constantly telling younger people that I see, typically people in the 20s to 40s, I really believe that they’re going to end up either receiving less benefits, they’re going to have to wait a lot longer to collect benefits or they’re going to have to pay more into the system in order to receive them or probably a combination of all of those scenarios. So typically for people under age 40, in the exact most of those people are actually realistic thing, “Hey you know what, let’s do some retirement planning and projections but let’s exclude social security…

Elizabeth: And then the free money (overlay)

Bill: Yeah, I mean, if it’s there, it’s great; if it’s not, let’s plan for the worst case scenario but certainly for all the people, I have to include it and frankly, I don’t think that the government is stupid enough to make any changes this close to retirement because there will really be political suicide.

Elizabeth: Yeah. I think nowadays, just to meet people who are voting in that age block. So we’re almost ready to go to the next break, so I want to give you a chance to share a happy booking and get information about your book and get a copy of your book.

Bill: Sure. People can go to the website, it’s a retireinaweekend.com and when they go there they can signup for the free newsletter, they can actually see a sneak peek of our free DVD and pick up a copy of the book and we’re always joking that people can retire in a weekend for less than a tank of gas. So they get the book and a DVD for less than a close of a tank of gas.

Elizabeth: [Laughs] Now it’s pretty expensive if they think of gas.

Bill: That’s right. This book looks like a deal compared to a tank of gas.

Elizabeth: [Laughs] Exactly. All right quick, thank you so much for being on the show though and everyone after the break, we will be talking a little bit about exit planning for your particular business and sharing the strategy of know what you want. We’ll talk about that after the break.

BREAK

Elizabeth: Welcome back everyone, this is Elizabeth Potts Weinstein, your host for The Wealth Spa Radio Show and before we get into the next part, I just want to remind you that if you are going to remember to come back to the Voice America Business Show to listen live, you can always listen to this show via an mp3 recording or podcast or get an email with the show whenever it is posted if you go to the website TheWealthSpaRadioShow.com. That’s TheWealthSpaRadioShow.com. There’s also some other freebies and things that are there too. Okay, so let’s get in to next topic which is - I’m going to give you some tips about creating an exit plan for your business because Bill, the last half an hour was talking about retiring in a weekend and really, what his information was about for everybody whether your in business or not. But I want to give you some tips specifically for you as a business owner, entrepreneurs, self-employed people, and for those of you who are thinking abut starting a business. Now, maybe you’re starting a business and you don’t actually have an exit plan because you enjoy this, you plan to do it for a significantly long time. I know for me, I don’t have a super detailed exit plan for the business that I’m running right now because I plan to do it for a very long time. However, there are certain things you can do, certain structure that you can put in place in your business and choices that you can make in your business. So we’ll make it easier for this time when you do want to get out. Maybe you want to get out because you have to; maybe something will happen, you have medical problems, you need to take a leave of absence, take care of somebody else, maybe it will be - you get a big book deal, you’re going to go on a big book tour and you need to take a bunch of time off in your business or maybe you get a idea for a new business and you want to spend less time on this business and more time on something else. Do you want to work on your business part time? Or maybe you actually want to fall on and retire from this business. You want to solve the business or somehow divest yourself out there and move on to the next thing, whether that’s not doing any work at all or whether it’s the next business or part time work or volunteer work or whatever it is. You may not know what that plan is. The specifics of what you want to do next but there’s certain things that you can do with your business now, so whenever that thing happens whether it’s an emergency or a conscious decision, whenever that opportunity or necessity arises, you’re set up. There’s two components to an exit plan. One component is how you pay for the exit. In other words, your business is worth money so you want to get value out of your business and we want to take value out of your business now to set aside so you have money later. So once again, how do we pay for that exit plan, how do we get money out of it. The second thing is the real logistics of the exit plan. What documents, structures, things need to be in place so the exit plan can work so makes it relatively easy, relatively straightforward, relatively effortless, so it’s not this horrible, stressful last minute thing. So looking at both of these issues, there’s a lot of things that you can do now in your business, no matter how full way your exit plan is, to make it easier later. One of the first things you can do is try to create value in your business now. And what I mean is, the carrying value of your business that separates from the hours you put in. I know for a lot of you, most of the value of this business is you. It’s the hours that you worked, the hours that you do selling your product or creating your product, the hours in delivery of your service to your clients, it’s pretty much you. And the problem is, is that if you want to work less hours or actually get rid of your business to do something else, if the only value of your business is you, you know, you can’t really sell you, right? You wouldn’t have your business have value that’s outside of your self. One way to do that is to create - half of revenue stream - create ways that you can sell things in your business with you not personally doing it. And this is really powerful with service-based businesses. So, let’s say you’re charging by the hour for some service, by the project-person service. Same thing about how can I get paid without me having to actually be there live to do this thing, right? That’s the problem. How are you going to ever sell your business if you’re the one doing all the work? So a lot of different ways that you can do passive revenue stream; one of the classic way, especially here in the internet world is to take this service that you do and systematize it so it’s a - this service in a box, right? So let’s take an example of creating a financial plan, we’ll build that. Recreate a financial plan for someone, he wrote a book about creating a financial plan for people and about how to retire in a weekend. So what does that do? It means he don’t even have to actually sit down with you for you to get these information from him. You can pay the money, a few bucks to buy this book; he gets revenue from it without him having to be there, okay? People can a thousand - a million of these books and yes he has promotion and marketing and he has that someone doing the delivery of the book or he might sell through Amazon.com or he could sell through bookstores so he doesn’t have to be involved in that but the idea is, he’s taking his knowledge in his head and the stuff he does for clients and put it in a book so people can buy it without him being there. And of course, you can do the same thing with audio CDs, actually in this book he think he has a DVD on the back. Yeah, it has this little movie you can watch. You an do the same thing with DVDs, CDs, you can have a binder and workbooks, all kinds of stuff where people can learn how to create a human resources plan for their business or do their own marketing system or create their logo or the picture of the landscaping or whatever it is that you do for your clients, a system they can take it home with them and they pay you 20 dollars or 2,000 dollars or whatever it is to get that thing in a box. Now, you can also do this with seminars and things like that; teaching your system but the problem is you’re still doing it personally. So doesn’t like come here for a truly passive revenue stream. It needs to be something where you’re not involved. Now, if you’re selling a product that is not a customized product for each person, it’s a product that people can buy, then you already have that passive revenue stream, the idea for is there but you’re doing all the selling, then it’s about training people, having a system to sell the product, so you don’t have to be there to sell it. So be as simple as selling it online or selling it through one of these online auction houses like eBay or something similar. But it has all speech, perhaps put in together a manual for people to be able to sell the product without you being there. Also look at - there is one way to - really you could do now, it’s going to help you with that exit strategy later, so you can do work less hours or you can actually - you’re business is this something it could sell, or license - there’s all kinds of stuff that you can do. So also want to look at creating intellectual property in your business. As we talk on past shows, just about trade markings, the name of your system that you teach; trade marking the name of your business, copywriting the works that you create. Now, if you’ve invented something it’s about patenting the thing that you’ve invented because those things can actually be sold outright. For instance the patent; if you’ve invented something and patented it, you don’t necessarily even need to produce all those things and sell them, you could sell the patent outright or license the patent to other people and they’re the ones to make the thing. Eventually, it may make a lot less money that way but you don’t have to do the work. It’s all leverage; it’s all passive revenue stream. And even if you decide that you’re going to be making the products now, for instance in the case having a patent, you still have this wonderful, valuable piece of property, that’s your patent in your business; same thing with copywrited work, same thing with trademarked work for trade secrets. The idea of being that later when you could have sell your business, your business have property inside of it. Just like owning a building or land that even if you’re not there, it’s to have this thing that has inherent value. Also domain name, let’s try domain name have a lot of inherent value. I was recently on Go Daddy looking for something; domain name selling for tens of thousand of dollars. I know that there’s been a domain name that sold for millions of dollars. I’m not saying you should go and invest on domain names but thinking about the domain name that you have, especially if it gets a lot of traffic, it may have value in it by itself. You also want to look at systematizing your business. What I mean is, is that during the course of your day where you work on your business, you do all kinds of different stuff over and over again. The way in which you respond in emails from prospect to client, what you say when you’re doing your initial consultation, the kind of mental script that you want to when someone calls you on the phone, how you handle the customer service, how you do your filing, how you do everything in your business, you’re probably doing the same things over and over again. And a lot of those things you could systematize, in other words you can make a list of those things that you do, the steps that you use, create a check list or book put a list or flowchart but you can hand it to someone else so they could do. Now, maybe right now, you know, maybe you had to hire to ask for or even hire a virtual assistant or an employee of some kind but you’re setting yourself up from the future you cut. You can hire your own staff, you can have more time to work on the business or do something else and when you systematize your business, when you take all the steps that you do and write them down on and stick them on a binder, that means your business - you’re going to sell your business in a box, right? There are a lot of things that you could do; you could license out - how to create a HR Consulting business, you could actually sell the financial plan - how to create a financial planning business in a box - I sell that to people. You can also sell your business outright because someone can walk in and be totally turn-key and they could start your business tomorrow because exactly everything that you do is completely written down and systematized. It’s also great for you. If there’s things that you do that may take you a long amount of time because you can get lost halfway through, great thing to have that checklist written down, so even when you’re doing it, you can be much more efficient. And you know as a side note, talking about hiring staff and virtual assistant and things, if you start doing this, if you start making list and checklist, all of the stuff that you’d go through, all the things that you do, it will help you to get out what you could delegate to someone else, and if you did hire someone, what they should be doing. If you study a huge amount of time, for instance, on the phone dealing with prospective clients or customer service, you may need someone to answer the phone, but maybe no one will really call you; they’re emailing you, so you need a different kind of approach then or maybe you spend a huge amount of time doing some filing and administrative work, so a virtual assistant won’t work. You need someone actually coming to your office or maybe you need someone who does certain things like web stuff. The web stuff is taking you all kinds of time. You need a web designer or a web person [laughs] what you want to call that tag stuff. So, we’re about ready to go to the next break but I just wanted to reiterate that when you’re doing things in your business, one thing you could always be kind of be on the side thinking about is, how can I create more of a real business, how can I systemize things in my business, how can I create value in my business, both for now you can make more money as well as creating value so later on whether it’s next week or 25 years from now, your business has so much more inherent value and you can sell it or license it or hire another people to run it for you and you can retire or do something different. All right, after the break, we are going to be talking about my secrets of successful entrepreneur’s tip of the week which is no lest you want it. We’ll talk about that after the break. 

BREAK

Elizabeth: Welcome back everyone. This is Elizabeth Potts Weinstein, your host for The Wealth Spa Radio Show. And so far on the show, we had Bill Losey, was talking about his book and information about retiring in a weekend and then I was sharing with you some tips about creating value in your business so if and when you do want to retire or you need some other sort of exit strategy, you’re set up. Now, I want to move on to the last topic for today which is “My Secret of Successful Entrepreneur’s Tip of The Week.” And this tip is about knowing what you want. I feel a lot with small business owners, entrepreneurs, people who are self-employed who don’t really have an idea of what they actually want their business to look like when it achieve its goals when it grows up. Maybe you know how much money you want to make or most people are just saying a lot [laughs] you know, most of the them say, “I want to make a lot of money”, maybe you have some specific ideas of how much money you want to make but you don’t know what that business will look like. Or, other people have told you, “Oh, you should do XYZ,” “You should franchise this idea” or “You should go get office space here and they get this big business here” or “You should hire all this people and bring in this partner and get this investors” and maybe that’s not actually what you want your business to be. Maybe you don’t want to do speaking engagement; maybe you don’t want to do seven hours, maybe you don’t want to be doing internet stuff or like me, you don’t want to do a radio show, maybe you would hate that. Maybe you don’t want to be in charge of a gigantic corporation. Whatever it is you have to figure out for your self what you want or at least figure out what you don’t want. I have a client who I’m actually interviewing this afternoon, who had a real powering experience with this where she - her husband have developed this wonderful system for exercising. It’s actually a strength-building system for older people, so people in their 50s, 60s, 70s. It worked even for people who have health problems or has physical problems; they can build their strength and have wonderful health and its incredible benefit. Right now, they have a studio and everything done one-on-one. Well, this is a wonderful system, these are wonderful people and they got hooked up four years ago with a business consultant who had this vision that they could get all big and they could get all these investors and they could franchise and she had all these visions and dreams about what they could do and she tried to put their things together and go get funding and all these stuff. And they kind of get swept along with it because it sounds cool, right? Like, franchising and having, you know, this system being taught in all these studios in all these different states and it sounds really cool and sexy and that’s what other people do, right? And that’s what you’re supposed to want. Now, it’s so true for a number of different reasons. One of the things my client really realized is that was it exactly what she really wanted? She didn’t want to be the CEO of one of the big giant company. Maybe she will open another studio or maybe eventually she’ll actually decide to franchise but she didn’t want to get that big, that complicated, that fast. And one thing good about the two is don’t forget that you don’t have to necessarily get big to make a lot of money. For example, Ginger Brown who is one of my mentors, you may know her as the Easy and Clean, when she makes like, I think last year she made like 2 million dollars or something, I mean she’s making over a million dollars a year, she doesn’t even have a like, like at any store front at all. She has zero employees, she has all virtual assistants, I mean, she’s a whole bunch of them but all virtual assistants, she has an office in her house, I mean that’s how she works. And she’s able to make seven figures doing that. And I see a lot of people who have store fronts, you know I have a couple who is in my management group and they have a store front business that they had for years and you know what? They’re not taking home anything, okay? [Laughs] This is from running up folks into debt. Just because you look big and you look successful doesn’t mean you’re making any money, okay? So that’s a thing that I really want you to think about in your business. Be specific about which goals are actually important to you; which is the vision that’s actually important to you. Is the vision, for example, is making a lot of money but it doesn’t mean you have to get big, it doesn’t mean you have to have a store front. Maybe the vision is actually is to be big. Maybe your vision is you want offices in every single state. That’s more important to you than even the money is and so if that’s true, you’re going to be going to a different path from the person who just want to take home 200,000 dollars a year, right? I’ve had this experience myself with my book, where my book, I had published by a small publisher who’s someone who I actually personally know and that means that I can sell the book, it gets on Amazon.com and BarnesandNoble.com with all the usual suspects and you can order it at the bookstore but Barnes and Noble won’t have a gigantic display on the shelf, at least not in the beginning. And one of my visions, just a personal vision for both of these books in my life is that I want to have to be able to walk into a Barnes and Noble and see my book on the shelf and that seem like it was a real success as opposed to just if you order it off of Amazon.com. And so I kind of thought, well in the event I sell my book out to a big publisher, if I want to get it in bookstores, but I realized that that was the “How” that - I actually don’t care about having a big publisher’s name on my book, that really isn’t important. I just want to be able to go to a bookstore and see it on the shelf. Well, there’s more than one way to get that. Doesn’t mean I have to sell out to a big publisher. Maybe I will, maybe I’ll try to do that for a different reason but maybe I just need to go to an independent bookstores here in town, the bunch of them here and there’s one in the valley, and get them to put the book on the shelf, especially not incredibly too hard, they’re very open to things like that here, so I could - in the next month or two, go ahead and do that and get my book on the shelf and hated those ways to get my book in bookstores but that have any sellouts to a big publisher. My point is, is that think about the goals for your business, you’re pushed to a goal through your life. One of the goals that is - what your actual goal that’s really important to you and there could be 20 different ways to get to that; not just the one or two ways that seem conventional, what other people tell  or even experts tell you need to do. So when you’re looking at your business, I recommend going back to your business plan, your vision for your business and think about what is the thing that’s actually important to me and you may want to change this round in relationship to that. All right, we’re almost at the end of the hour. I want to remind you that if you would like to get this show delivered to you automatically by email or by podcast or if you know what an RSS feed, if you don’t know what it is that’s fine, if you know an RSS feed is, you can get  it delivered by RSS feed. You can go to the website for the radio show which is The Wealth Spa Radio Show, that’s TheWealthSpaRadioShow.com. [Music] Also there you can send me an email, fill out an information and ask questions that I can answer on a future show. Thank you so much for listening today and I hope you have a wonderful Valentines Day, if you’re listening to this today and tomorrow and I look forward to speak with you next week. Bye!

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