financial strategies for aspiring entrepreneurs
DESCRIPTION
This is the presentation I gave for the University of Texas-Pan American Veteran Business Outreach Center covering financial strategies for aspiring entrepreneurs. If you would like to learn more, you can visit my website, http://www.hullfinancialplanning.com and you can sign up for my 52 week Personal Finance Game Plan and receive a free e-book, http://www.hullfinancialplanning.com/four-places-your-monkey-brain-should-never-live/ Provided by Fort Worth financial planner Hull Financial PlanningTRANSCRIPT
www.hullfinancialplanning.com
Financial Strategies for Aspiring Entrepreneurs
Jason HullHull Financial Planning
www.hullfinancialplanning.com
Who Is This Presentation For?
• People who are considering starting up their own companies
• People who have recently started a company• People who are being asked to help fund a
startup (e.g. friends and family)
www.hullfinancialplanning.com
What Will You Learn?
• How to start preparing for an entrepreneurial life before you ever leave your job
• What is “runway” and how does it improve your chances of succeeding in your business?
• How to research business ideas on the cheap• Friends, family, and fools – to raise or not to
raise?• Making the leap
www.hullfinancialplanning.com
Who Am I?
• Army veteran• Founded and sold a software development
company• Financial planner, CFP® candidate• Personal finance columnist, U.S. News &
World Report
www.hullfinancialplanning.com
Why Most People Want to Start a Business
*http://www.sangrea.net/rijidij/pix/bullying_psycho_boss2.jpg
www.hullfinancialplanning.com
Why Most People Want to Start a Business
*http://www.sangrea.net/free-cartoons/work_forward-planning.jpg
www.hullfinancialplanning.com
Why Most People Want to Start a Business
*http://www.sangrea.net/free-cartoons/social_human-condition.jpg
www.hullfinancialplanning.com
Why Most People Want to Start a Business
*http://www.sangrea.net/rijidij/pix/cart_intelligent_design.jpg
www.hullfinancialplanning.com
The Reality Check Often Bounces
*http://smallbiztrends.com/wp-content/uploads/2012/08/survival-by-sector.png
www.hullfinancialplanning.com
What Motivates You to Start a Business?
• Passion for something• Escape from cubicle Hades• The dream of getting rich• Independence• Control• …
www.hullfinancialplanning.com
Simple Formula for Succeeding in Business
• You must…• Provide something…• Which other people will pay you for…• That you can provide or produce…• At a profit…• While giving them value.
www.hullfinancialplanning.com
Preparing for the Entrepreneurial Life
Keep your day job
www.hullfinancialplanning.com
Preparing for the Entrepreneurial Life
Save as much money as you can
www.hullfinancialplanning.com
Preparing for the Entrepreneurial Life
Build your network
www.hullfinancialplanning.com
Preparing for the Entrepreneurial Life
Generate ideas. EVERY DAY.
www.hullfinancialplanning.com
Preparing for the Entrepreneurial Life
Sketch out the plan
www.hullfinancialplanning.com
Squeeze More Out of Your Budget
Remove recurring costs you don’t need• Do you need cable TV?– Try Netflix, Hulu, PlayOn, and stations’ websites
• Paying for more cell phone than you need?– Lower minutes– Get Google Voice– Remove landline
• Gym membership you don’t use?– Plyometrics, body weight exercise, home Crossfit
www.hullfinancialplanning.com
Squeeze More Out of Your Budget
Automate your finances• Set up side accounts– Christmas fund– Home/car insurance fund– Roof/car replacement fund
• Have investments automatically withdrawn• Set up automatic bill pays so you don’t have to
remember when to pay them
www.hullfinancialplanning.com
Squeeze More Out of Your Budget
DEBT SUCKS• KILL YOUR DEBT OR IT WILL KILL YOU• 46.7% of American households carry a credit card
balance• Pay absolutely everything you can towards debt
(credit card, personal loan, car loan, mortgage)• Look at total interest payments first before
deciding which one to pay down/off – combines psychology and math
www.hullfinancialplanning.com
Make Your Small Business Work
WHY AM I A FINANCIAL PLANNER?
Because I want people to get good advice at a rea-sonable price and not be screwed by unscrupulous salespeople
www.hullfinancialplanning.com
Make Your Small Business Work
What's Your Why?
Because …
www.hullfinancialplanning.com
Make Your Small Business Work
Who you don’t serve is as important as who you serve
• If you’re everything to everyone, then you’re nothing to anyone
• Trolls should live under the bridge• Create the in-group bias
www.hullfinancialplanning.com
Small Business and Money
*http://www.flickr.com/photos/84263554@N00/255847189/
www.hullfinancialplanning.com
Where Do Most People Get Seed $?
• Credit cards• Home equity loans• Bank of Mom & Dad• Anyone who will listen to their great idea• Private equity and venture capital (RARELY)
www.hullfinancialplanning.com
Where Should You Get Seed $?
• Customers• Grants• Your own savings• Outside investors (RARELY)
www.hullfinancialplanning.com
Why Not Friends and Family (and Fools)?
• Reciprocity• Changes relationship• Changes business risk profile• Thanksgiving dinner
www.hullfinancialplanning.com
Researching Business Ideas
• Google Trends: http://www.google.com/trends/
• Google Keyword Tool: https://adwords.google.com/KeywordTool
• Survey Monkey: http://www.surveymonkey.com/
• Set up a “muse page”: http://launchrock.com/
www.hullfinancialplanning.com
Make Your Small Business Work
Don’t let self-employment tax kill your runway• Create the right corporate structure• Understand the difference between salary and
distributions• Are you taking all the deductions you can?• Don’t let the tax tail wag the business dog
www.hullfinancialplanning.com
Making the Leap
*http://www.flickr.com/photos/clickflashphotos/2824142858/
www.hullfinancialplanning.com
You’re Ready When…
• You’ve saved up 6+ months of expenses (business and personal)
• You can identify enough potential customers to provide 2 months of revenues
• You require less than a month to be ready to start selling to customers.
• Your side gig has provided you enough revenues to replace a significant portion of your income
AND
• You could get more customers if you had extra time
OR
www.hullfinancialplanning.com
Rules of Thumb
• No entrepreneur has ever said “I saved up too much money before I started.”
• 6 month/$1,000 side gig rule• Your spouse is a shareholder whether or not
you think so• Expect to succeed. Prepare to fail.
www.hullfinancialplanning.com
How to Reach Me
• http://www.hullfinancialplanning.com• [email protected]• (817)476-0584