Most people daydream about the idea of running their own business. The freedom to have no boss, set your work hours, and control your own financial destiny. However, running your own business doesn’t come without taking on some bumps and bruises. Here are ten important lessons that every entrepreneur should keep in the back pocket.
Which person in the White House will Donald Trump fire first if he is elected President of The United States? A few weeks ago, I was able to watch a piece of Donald Trump’s coming out party announcing his candidacy for President. Whether you like Donald Trump or you don’t like Donald Trump, you have to admire his uncanny ability to be savvy about using all outlets possible to build the riches of his empire. Trump golf course. Trump hotels. Trump water. It never ends. Here are five business lessons that all business owners can learn from Donald Trump. (more…)
So, what the heck is a ‘ganjapreneur’ anyway? If you have nothing great to do for a few hours and want to laugh out loud in a real way besides what you write on a text message, take a gander here where you can see just about any marijuana slang you could ever imagine. Ganja, is classically defined as another widely-accepted name for cannabis. The term ganja is often attributed to Rastafarian culture, but it is in fact the Hindi word for hemp, introduced to Jamaica by Indian indentured servants. Lately, its usage in western society has become incredibly mainstream and, in some cases, grossly over-commercialized. Thus, the ever increasing ganjapreneur are those that start business in, on, or around the substance known as marijuana.
As somebody who deals in life insurance, your first instinct is to tell yourself that nobody who smokes marijuana or even remotely puts it in his or her body is ever going to have a chance to get life insurance. In fact, even if they don’t smoke any marijuana, what would be the chances of them getting approved for a buy sell or key man life insurance policy if they are an all cash business? Even if you are in the several states where marijuana is legal or almost half of the country where some form of medical marijuana is legalized as well, how will you convince the insurance company that you would be a low risk profile for life insurance? What a difficult dilemma for the fast growing ganjapreneur in America.
What’s funny about this topic is that I’ll bet every person has known someone in their life who applied for life insurance and this scenario came up during the application. The person is filling out the application and the question comes up about whether or not they smoke. The new applicant asks, “Do they mean cigarettes or some other type of substance?” After the insurance agent politely chuckles under their breath, they reply with, “They mean any type of smoking.” Then your prospect responds with, “I’ll sign up for this life insurance but it will take me a few weeks before I can take a medical exam. I have never smoked in my entire life.” Any good life insurance agent can put two and two together, but what can you do to prepare yourself if you are a ganjapreneur?
For most general marijuana smokers, you’ll likely have to classify yourselves as smokers as you would someone who smokes cigarettes. Depending on the insurance company, they would pay the table rates of what a smoker would which could double their rates. There are still some carriers that say marijuana is illegal everywhere and thus will not underwrite a marijuana smoker so do your homework in advance. Since insurance carriers are varying more widely these days, you won’t get preferred rates if you admit to smoking marijuana even recreationally, but you could still get a standard non tobacco rates for only having a ‘celebratory joint’ here and there. Sometimes, insurance carriers call these people social marijuana smokers. Go figure that!
For ganjapreneurs, it is going to be important to keep excellent books and records and despite the fact that your local bank may not bank you, there is no reason to not legitimately keep a balance sheet, profit and loss, and pay taxes for your tax return. If you want life insurance, a buy-sell agreement, disability insurance, or key man insurance, you are going to have to prove some legitimate books and tax returns to the insurance company.
What may have seemed like a joke in the past will become a big business in the future as more and more people smoke marijuana in the United States. It will pay to have an insurance agent who knows how ganjapreneurs work within this industry anywhere from those who directly sell marijuana to the person selling paraphernalia to the public. Having the right person on your side may make the different between getting a yay or nay from the insurance company!
There are different reasons why business owners decide to build a business. Some do it for their family legacy. Some do it for the potential of a big cash out down the road. Some just build a business so they don’t have to work for the man, and get the business to generate enough income to support their lifestyle. Whatever may be the reason you start a business, the question will come up at some point on when the right time (if at all) will come to eventually sell your business. Here are some smart money moves thoughts on when may be a good time to sell your business.
- Historically low capital gain rates– Currently, we have long term capital gain rate of 15% on most items, especially if you are considering doing an asset sale of your business. It has been very uncertain where this rate will head in 2016 or 2017 with a new President, but 20% is really where the maximum rate stands currently (23.8% if you add in the excess Medicare tax). There is no telling where this will be in the future, so one consideration is where low capital gains rates are at the current time.
- It feels like a job– There is always a real excitement anytime you start a new business venture. Over time, the business may not necessarily be the panacea that it was when you started the business. If you can’t find good employees to run the day to day operations or your family doesn’t want to help lighten your load, the business can turn into a job as you grow in size. When you find yourself not having fun anymore, it may be a good sign that it is time to find out whether or not someone can pay you enough cash to walk away from the business.
- Borrowing rates are cheap– If you find a qualified buyer for your business, interest rates are still currently cheap for a seller to finance the business. Just like you saw with home values in the mid 2000’s, you make be able to eke out an extra $100,000 on the price of your business because the low financing rates won’t make borrower’s monthly payment substantially different. Remember, as interest rates continue to stay cheap, making mergers and acquisitions from sellers is going to be more attractive.
- Your industry is changing– As with any business, it is important to keep a close eye on industry trends and make sure you don’t get lost in a tidal wave of change. Perhaps the technology you developed is getting out of date. Or, there are regulatory changes to your industry that will inhibit future explosive growth. Sometimes, the peak time to sell your business is when you are attractive to another buyer as an integration or snap on piece to their business.
- Uncertainty of the cost of benefits– One of the big issues that continue to plague businesses is the overall cost of health care and benefits. Retaining employees in business is becoming more and more competitive, so you’ll need to consider how much benefits will eat into your future profit. If you continue to build the business, you’ll have to determine if your pricing and overall revenue can continue to sustain this growing expense line item in your profit and loss.
You should always consult a qualified business broker, financial advisor, CPA, and/or attorney before you sell your business
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In the first year of a start up operation, there is a great focus of energy from the new business owner on client acquisition. Gaining new customers opens the floodgates for the generations of revenue to pay the bills of the business. However, one of the tough lessons learned by young owners is not thinking clearly though pricing out the services of your business correctly.