“The only good is knowledge and the only evil is ignorance.” – Socrates
What can you do today to start getting a grasp on your current legal and financial situations?
When you take the time to thoroughly analyze the framework supporting your company, you give yourself a powerful and indispensable gift – one that could be the difference between a sudden bankruptcy or legal loss and sustainable profits for years to come.
3 KEY COMPONENTS OF ANTICIPATION
- KNOW HOW TO READ, INTERPRET & MEASURE YOUR FINANCIALS
- HAVE A SYSTEM IN PLACE TO MANAGE & MEASURE YOUR COSTS
- EMPLOY LEGAL EXPERTISE WHERE IT IS NEEDED
Keith Cunningham says you must have “Optics”, you need to be able to see where you’ve been and what the levers are to change the results for the next period of time. What gets Measured gets Managed.
Tony Robbins’ analogy for anticipation is that it is like playing Video games with a child. You play the game and get killed in 2 seconds. Then you get to watch as the child plays for 45 minutes before dying. Why are they so good? Why so much better? Because they know the road ahead! They’ve played the game so many times, they know exactly where the pitfalls are, where the enemies are, and where the challenges will be.
Thus, anticipation includes having “Optics” to know where you are and where you want to be so you can make adjustments as necessary. And, you need to be able to Anticipate the challenges and road ahead, so you need the assistance of someone who knows the road ahead and/or can navigate the pitfalls and danger zones for you.
1. KNOW HOW TO READ, INTERPRET & MEASURE YOUR FINANCIALS
ACTION ITEM #1
Collect every financial report, analysis, and statement to which you have access. Interview the personnel or advisors who generate your data and make sure you understand the outcome for what is being collected. Constantly make strategic adjustments as needed.
QUESTION: How can you create a system to consistently review your business’ figures (including but not limited to your Profit & Loss Statement, Balance Sheet and Cash Flow statement, etc.)?
2. HAVE A SYSTEM IN PLACE TO MANAGE & MEASURE YOUR COSTS
ACTION ITEM #2
a) Define a process of checks and balances, b) Define a strategy for cash flow, c) Closely evaluate all your expenses, and d) Explore all possible opportunities to maximize your income.
QUESTION: How can you reduce your expenses by 10% in the company?
If you can do this and your profit margin is 20%, you just increased your profit by 50% (10% additional profit due to decreased expenses is 50% of your current 20% Profits).
3. EMPLOY LEGAL EXPERTISE WHERE IT IS NEEDED
ACTION ITEM #3
Hire an attorney up front to make sure you know where potential legal challenges may show up, and don’t cut corners when it comes to getting the right attorney to review a situation or handle a case. (Note: Per Tony, the average lawsuit today beings with legal fees upwards of over $250,000.)
According to Tony Robbins’ Business Mastery workbook, “Attorneys are like football referees. They know the rules of the game and when a foul occurs, players pay their lawyers to straighten it out. That is how the game works… like it or not! An investment in a quality attorney will save you a significant sum in the long run. Note: The best players in business hire an attorney to vet every deal that comes to the table before they even get involved in a negotiation.”
QUESTIONS: What more can I do to reduce my risk or avoid losing my income or assets from frivolous or legit lawsuits from unhappy or angry clients, jaded partners, divorce, injured third parties, unforseen problems, injuries or accidents, latent defects, products gone bad, employee injuries, auto accidents while on business, employee lawsuits for wrongful termination or harassment, key employee or owner/partner disability or deaths, family health issues? Can I get better asset protection and tax advantages through multiple entity structures? Should I move assets Offshore and out of the US Court jurisdiction?
QUESTIONS: What will happen to my family if I am disabled or die in an accident or the big 3 killers (diabetes, cancer, heart disease)? What will happen to my business and employees if this happens to me? Who will make decisions for me if I am disabled and unable to do so? Am I setup to make decisions for my spouse or business partner(s) if they are disabled or die? Who will get my assets when I die – my loved ones or unknown relatives? How can I avoid a 40% Estate tax when I die? Will my partner’s spouse become my new partner if something happens to my partner? How will we afford the nursing home costs for my parents?
Note: It’s my BIASED opinion, as an attorney navigating the Estate Planning and Asset Protection minefield, that the goal for Asset Protection is not to avoid all liability and not pay a cent for any type of legal situation. More so, Asset Protection is a way to get leverage and negotiating power when the inevitable lawsuit arises. If you are at fault and hit someone with your car, you obviously need to indemnify that person to some extent. However, by preparing beforehand, you can make it so difficult for Plaintiff’s Attorneys (who are the real drivers of litigation in America) to get to your assets, they are willing to negotiate reasonably for just compensation instead of ridiculous amounts (like $11,000,000 from an employer when an employee drilled through his own hand at work, or for back surgery after taking out the waste paper basket). If you are a Doctor and make a mistake, obviously you should make the patient whole, however it could be the difference between a couple thousand dollars or everything you’ve worked for your entire life.
ACTION ITEM #4
If you don’t already have one, hire a CFO (Chief Financial Officer) or a virtual CFO to read your financial reports and let you know what levers to change to change the results and direction of the business.
Alex Beyer, Esquire
AlexBeyerEsq@gmail.com
http://www.StateStoryStrategy.com
Constant And Never-ending Improvement 