Succession Development and the Independent Business Owner

As a third generation independent business owner, I have lived through, and seen how sad it is when business owners retire with little to show for their lifetime of efforts. The statistics are not great either, approximately ****94% of Australians retire with little or no self-derived income and require Government assistance to survive.In my opinion we have been sold a bit of a lemon with regards to superannuation with most Australians thinking that simply paying into a super fund will guarantee a great retirement income and lifestyle. The facts are that for Australian women our superannuation falls grossly short of what is needed and whilst the average Australian male has approximately double that of the women in Super, it is nowhere near enough to survive on. As we are living longer, we can spend almost a third of our lives in retirement. Just doing some simple maths will show if you have enough. But Australia we have been sold that by putting money into Superannuation that we will be all right in the end. Here is the wakeup call; Superannuation alone is nowhere near enough for most of us to survive on without Government assistance.For the independent business owner, unfortunately, they pay themselves last and many don’t even have superannuation or if they do, they have not contributed for years. The Government regulations on business owners is so arduous that it is becoming harder and harder to put away anything for themselves.Many independent business owners spend their days completely occupied with gaining market share, hiring and keeping employees, motivating staff, beating the competition, to give succession development any thought. Strange how such highly motivated, intelligent and energetic people can avoid such an important planning issue to their business.For the independent business owner it is a somewhat daunting and complex process to address their working life coming to an end, and most dread tackling it, they would rather work well beyond their years than face succession development or retiring. Many business owners have not accumulated much super instead they have put it back in their business. However on retirement they often do not sell the business for enough to live on in the retirement years. I’ve worked with many independent business owners who become frustrated and bitter with their environment towards the end of their career, making their business an even less viable option for someone to take over. For the majority of these hard working, self-sacrificing Aussies, there is no gold watch, goodbye party or big deposit into their bank account to say well done for your years of toil.However, most successful succession development has only three simple steps.

Keep the succession plan simple

Stay realistic about goals

Measure the steps of the plan for succession outcomes
Whilst most information on succession development has to do with the handing over of the business or the duties to someone else, an exceptional Financial Advisor will look at succession development with a slightly different focus, one that addresses your end income revenue stream and lessening your financial burden, thus reducing the stress on the independent business owner when it comes to the best financial opportunities to selling or handing over the business.Here is an example of the difference between doing nothing and engaging a professional financial advisor. Lucy W is single, an independent business owner, and 54 years old. Lucy has estimated that she needs approximately $50,000 per annum to live on. Lucy has around $60,000 in her superannuation fund.( *The average superannuation for women is $41,000) Upon retirement at age 67, Lucy will have not even two years of income from her superannuation, and then have to rely on the Government for a pension of approximately $20,000 P/A. (**More than half Australian women have incomes of less than $30,000P/A) After meeting with a financial advisor and working out a blueprint, Lucy could attain a retirement income of $60,000 per annum by investing in premium properties, strategically selected for optimum returns.Lucy’s plan involved purchasing four properties within two years and waiting for the compounding capital growth and rental return to occur which will reach above her estimated income goal in year six, when she can retire at age 60 independent of age pensions. *** (77% of Australian women rely on age pension in retirement)Most self-structured property portfolios have no plans other than obtaining rental properties, with no strategic process, thinking that the accumulation of properties would create sufficient wealth or income alone. A good financial advisor will incorporate acquisition, management and exit strategies to achieve specific wealth or income goals.Lucy had also recently paid to attend a get rich quick seminar that suggested it was easy to buy real estate, subdivide, build, and you would get rich fast. Lucy had not costed the entire project, did not know about the difficulties of building and different types of building contracts, and what happens when costs blow out and did not know how to take all the risk out of the transaction. The reality is far different, and to be successful requires a great deal of expertise and knowledge to achieve positive and predictable results.After posing a few strategic questions to Lucy she became aware that she did not have anywhere near the required knowledge, time or skill to perform such high risk real estate developments. Instead she chose to engage a professionals future certain plan, which has underwritten advice, and strategies that simply work.Do nothing Professional Strategy Succession StrategyAge 54 54Home value $500,000 $500,000Superannuation $60,000 $60,000Retirement Age 60 $20,000 p/a $60,000 p/aRetirement Age 67 $20,000 p/a $120,000 p/aWith an approach that allows the independent business owner to be free of the concerns about future income, I’ve seen from experience how their performance and enthusiasm improves and they end up having a much better result with their succession development, and actually look forward to it. So a professional financial advisor will do the following for you;

Keep your plan simple;

Stay very realistic about goals;

Measure the steps of the plan for succession outcomes
The example used for this article was a client of FLAG Property Investment Services.

S&P 500 Rallies As U.S. Dollar Pulls Back Towards Weekly Lows

Key Insights
The strong pullback in the U.S. dollar provided significant support to stocks.
Treasury yields have pulled back after touching new highs, which served as an additional positive catalyst for S&P 500.
A move above 3730 will push S&P 500 towards the resistance level at 3760.
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Pfizer Rallies After Announcing A Huge Price Hike For Its COVID-19 Vaccines
S&P 500 is currently trying to settle above 3730 as traders’ appetite for risk is growing. The U.S. dollar has recently gained strong downside momentum as the BoJ intervened to stop the rally in USD/JPY. Weaker U.S. dollar is bullish for stocks as it increases profits of multinational companies and makes U.S. equities cheaper for foreign investors.

The leading oil services company Schlumberger is up by 9% after beating analyst estimates on both earnings and revenue. Schlumberger’s peers Baker Hughes and Halliburton have also enjoyed strong support today.

Vaccine makers Pfizer and Moderna gained strong upside momentum after Pfizer announced that it will raise the price of its coronavirus vaccine to $110 – $130 per shot.

Biggest losers today include Verizon and Twitter. Verizon is down by 5% despite beating analyst estimates on both earnings and revenue. Subscriber numbers missed estimates, and traders pushed the stock to multi-year lows.

Twitter stock moved towards the $50 level as the U.S. may conduct a security review of Musk’s purchase of the company.

From a big picture point of view, today’s rebound is broad, and most market segments are moving higher. Treasury yields have started to move lower after testing new highs, providing additional support to S&P 500. It looks that some traders are ready to bet that Fed will be less hawkish than previously expected.

S&P 500 Tests Resistance At 3730

S&P 500 has recently managed to get above the 20 EMA and is trying to settle above the resistance at 3730. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If S&P 500 manages to settle above 3730, it will head towards the next resistance level at 3760. A successful test of this level will push S&P 500 towards the next resistance at October highs at 3805. The 50 EMA is located in the nearby, so S&P 500 will likely face strong resistance above the 3800 level.

On the support side, the previous resistance at 3700 will likely serve as the first support level for S&P 500. In case S&P 500 declines below this level, it will move towards the next support level at 3675. A move below 3675 will push S&P 500 towards the support at 3640.

Reasons Why SMS Marketing Is Better Than Any Other Mode of Marketing

SMS Marketing is better than any other mode of marketing? This might seem like a hot topic among marketers all around the world. Most of the marketing mediums have been available since decades, but the widespread of mobile devices has definitely changed the way every marketer treat these options in the marketing plans.SMS Marketing is known to come as a reliable option to reach out to end users with precise and targeted messages. Mentioned below is a complied data that compares SMS marketing with the other modes of marketing to give you an overview of their current standing as an effective marketing tool.1) Open Rate- Open Rate of SMS Marketing – 90%- Open Rate of other modes of marketing – 30 to 35%These numbers do not leave anything for us to debate on as your customer is bound to read your message sent via SMS.2) Quantity matters- Number of text messages; the lesser, the better- Number of emails or ads, the more the betterWe do not need to think about this twice. Just think about how you treat your messages and emails. If you keep receiving an email from the same address, there is a probability you might just open it once. With messages, nobody is tolerant towards unnecessary disturbance. The point of a text message is just to give out the required information in a precise manner and that’s what people expect from marketing messages.3) Nature of Campaign/SMSThe nature of the message is very vital for text messages and any other mode of marketing. For instance, if you have an offer or discount to offer to your customers, SMS Marketing is the perfect mode. No other medium of marketing will create an impact as text messages when discounts and offers are considered.4) Click – Through – Rate- The CTR of SMS Marketing – 40%- The CTR of other modes of marketing – 7 to 10%The reason why every marketer is taking SMS Marketing seriously is because of the wide penetration of mobile phones in the market. Mobile phones are affordable and within everybody’s reach and so are the data packages.And so, the possibility of the end-user opening the link sent via message, provided it is of their given interests, is much higher now than ever.Regardless to say, an SMS will always find a way in your customer’s inbox. Finally, it is safe to say that SMS marketing is a more effective tool than any other. Have you tried it yet?