Ironshield Financial Planning

KEY039 | Traditional Financial Planning Is Flawed!

Scott Plaskett, CFP — Wed, 15 May 2013 13:00:21 +0000

Traditional Financial Planning Is Flawed! -How To Use What I’m Going To Share With You Over The Next Little While.

IN THIS EPISODE OF THE KEY TO RETIREMENT™ PODCAST…

I’m going to talk to you about how traditional financial planning is inherently flawed and it’s no wonder your not making progress you feel you should be.

And if you’d like to get a jump start on finding the answers to your key financial planning questions, using our proven system, you can book your risk free, no-obligation initial meeting. One of our specifically trained Certified Financial Planners will be pleased to walk you through The KAIZEN Financial Planning Process™.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

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KEY038 | Life Insurance – What You Need To Know

Scott Plaskett, CFP — Wed, 01 May 2013 13:00:32 +0000

Life Insurance – What You Need To Know

IN THIS EPISODE OF THE KEY TO RETIREMENT™ PODCAST…

I’m going to have a pretty candid discussion about Life Insurance and discuss what you need to know to make good decisions about your insurance portfolio.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

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Business Valuations | FLY042113

Scott Plaskett, CFP — Sun, 21 Apr 2013 18:00:00 +0000

On today’s episode, I interview Jason Kwiatkowski, a Partner with Valuation Support Partners Ltd.

We chat about why business valuations are so important to your business and what the major trends are that business owners need to be aware of.

KEY037 | The “Sell” Side of Investing

Scott Plaskett, CFP — Mon, 15 Apr 2013 13:00:26 +0000

The “Sell” Side of Investing

IN THIS EPISODE OF THE KEY TO RETIREMENT™ PODCAST…

I have an in-depth discussion with Charles Wilton, a Portfolio Manager with the Private Investment Management Group at Raymond James. In the last episode we discussed the buying side of investing and we further the discussion and chat about the flip side, the time to sell.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

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The “Sell” Side Of Investing | FLY040713

Scott Plaskett, CFP — Sun, 07 Apr 2013 18:00:00 +0000

On today’s episode, I have an in-depth discussion with Charles Wilton, a Portfolio Manager with the Private Investment Management Group at Raymond James.

In the last episode we discussed the buying side of investing and we further the discussion and chat about the flip side, the time to sell.

KEY036 | Financial Planning For Business Owners Is Simply Different

Scott Plaskett, CFP — Mon, 01 Apr 2013 14:34:58 +0000

Financial Planning For Business Owners Is Simply Different

IN THIS EPISODE OF THE KEY TO RETIREMENT™ PODCAST…

I’m going to highlight the single biggest problem business owners face when it comes to their retirement plan, and how the sellability score report can pave the road to solving that problem.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

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Tax & Estate Planning | FLY032113

Scott Plaskett, CFP — Thu, 21 Mar 2013 19:02:00 +0000

In this edition of FLY ON THE WALL, I invited Mark Echlin, President of Simple Insurance Solutions to chat about some of the most significant changes taking place in the area of tax and estate planning. For those Canadians motivated to learn the latest strategies in the area of tax and estate planning this call will be of tremendous value.

IRONSHIELD Financial Planning’s “Fly On The Wall” update calls are recorded by Scott Plaskett and allow you to get a behind the scenes look at one of his professional update calls. Watch and listen as a “fly on the wall” and get some of the most valuable information you will find on the internet.

KEY035 | Investment Teaching Moment

Scott Plaskett, CFP — Fri, 15 Mar 2013 13:00:01 +0000

Investment Teaching Moment

IN THIS EPISODE OF THE KEY TO RETIREMENT™ PODCAST…

I interview Charles Wilton, Private Portfolio Manager at Raymond James Financial – one of the most respected investment management firms in North America. We will be going through what’s involved from a behind scenes look at what it takes to find a company that’s worth buying.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

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The Hierarchy of Recurring Revenue

Scott Plaskett, CFP — Wed, 06 Mar 2013 03:27:00 +0000

How to make your company irresistible to potential buyers

One of the biggest factors in determining the value of your company is the extent to which an acquirer can see where your sales will come from in the future. If you’re in a business that starts from scratch each month, the value of your company will be lower than if you can demonstrate the source or sources of your future revenue. A recurring revenue stream acts like a powerful pair of binoculars for you – and your potential acquirer – to see months or years into the future; creating an annuity stream is the best way to increase the desirability and value of your company.

The surer your future revenue is, the higher the value the market will place on your business. Here is the hierarchy of recurring revenue presented from least to most valuable in the eyes of an acquirer.

No. 6: Consumables (e.g., shampoo, toothpaste)

These are disposable items that customers purchase regularly, but they have no particular motivation to repurchase from one seller or to be brand loyal.

No. 5: Sunk-money consumables (e.g., razor blades)

This is where the customer first makes an investment in a platform. For example, once you buy a razor you have a vested interest in buying compatible blades.

No. 4: Renewable subscriptions (e.g., magazines)

Typically, subscriptions are paid for in advance, creating a positive cash-flow cycle.

No. 3: Sunk-money renewable subscriptions (e.g., the Bloomberg Terminal)

Traders and money managers swear by their Bloomberg Terminal; and they have to first buy or lease the terminal in order to subscribe to Bloomberg’s financial information.

No. 2: Automatic-renewal subscriptions (e.g., document storage)

When you store documents with Iron Mountain, you are automatically charged a fee each month as long as you continue to use the service.

No. 1: Contracts (e.g., wireless phones)

As much as we may despise being tied to them, wireless companies have mastered the art of recurring revenue. Many give customers free phones if they lock into a two or three-year contract.

When you put your business up for sale, you’re selling the future, not just the present. So if you don’t have a recurring revenue stream, consider how best to create one, given your type of business. It will increase the predictability of your revenue, the value of your business, and the interest of potential acquirers as they look to the future.

KEY034 | Tax and Estate Planning Update

Scott Plaskett, CFP — Fri, 01 Mar 2013 16:31:09 +0000

Tax and Estate Planning Update

IN THIS EPISODE OF THE KEY TO RETIREMENT™ PODCAST…

I interview Mark Echlin, President of Simple Insurance Solutions. Mark is a tax and estate planning specialist and he updates me on some of the most pivotal changes that are currently taking place in the world of tax and estate planning. The bottom line is the department of finance is making some drastic changes that will negatively affect those who wait to put in place their tax and estate plan.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

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Investment Teaching Moment, Charles Wilton | FLY022113

Scott Plaskett, CFP — Thu, 21 Feb 2013 23:40:00 +0000

In this video, I have an in-depth discussion with Charles Wilton, a Portfolio Manager, in the Private Investment Management Group at Raymond James – one of the most respected investment management firms in North America.

In today’s discussion we go into detail on what it takes for a portfolio manager to make a decision when it comes to investing or not investing in a particular security. You will be amazed at what goes in to what on the surface looks like an easy discussion to make. You need a strong discipline and process that you can depend upon in order to keep emotions out of the decision making process. Something doing yourself investors have an incredible hard time doing. We work with and hire pros because we know when it comes to investment management it’s not child’s play.

KEY033 | How Sellable Is Your Business

Scott Plaskett, CFP — Fri, 15 Feb 2013 14:00:15 +0000

How Sellable Is Your Business

IN THIS EPISODE OF THE KEY TO RETIREMENT™ PODCAST…

I interview John Duguid and Rod Howland, Managing Directors at Gallium Corporate Finance. We have a great discussion on what it takes to build a business that is worth a ton of money – to someone else.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

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Four Traps To Avoid When An Acquirer Comes Calling

Scott Plaskett, CFP — Thu, 07 Feb 2013 20:13:00 +0000

You may be eager to sell your business, and happy to have an acquirer at your doorstep, but what’s it like when an acquirer starts looking inside every corner of your business?

Most professional acquirers will have a checklist of questions – both objective and subjective – that they need answered before getting serious about buying your company.

Examples of objective questions include:

When does your lease expire and what are the terms?
Do you have consistent, signed, up-to-date contracts with your customers and employees?
Are your ideas, products and processes protected by patent or trademark?
What kind of technology do you use, and are your software licenses up to date?
What are the loan covenants on your credit agreements?
How are your receivables? Do you have any late payers or deadbeat customers?
Does your business require a license to operate, and if so, is your paperwork in order?
Do you have any litigation pending?

Then they’ll try to get a subjective sense of your business, including figuring out just how integral you are personally to the success of your business. And that requires some investigative work as well as some tricks of the trade. For example:

Trick #1: Making last-minute changes.

By asking to make a last-minute change to your meeting time, an acquirer gets clues as to how involved you are personally in serving customers. If you can’t accommodate the change request, the acquirer may probe to find out why and try to determine what part of the business is so dependent on you that you have to be there.

Trick #2: Checking to see if your business is vision impaired.

An acquirer may ask you to explain your vision for the business, which is a question you should be well prepared to answer. However, he or she may ask the same question of your employees and key managers. If your staff members offer inconsistent answers, the acquirer may take it as a sign that the future of the business is in your head.

Trick #3: Asking your customers why they do business with you.

A potential acquirer may ask to talk to some of your customers. He or she will expect you to select your most passionate and loyal customers and will therefore expect to hear good things. The customers may be asked a question like “Why do you do business with these guys?” The acquirer is trying to figure out where your customers’ loyalties lie. If your customers answer by describing the benefits of your product, service or company in general, that’s good. If they respond by explaining how much they like you personally, that’s bad.

Trick #4: Mystery shopping.

Acquirers often conduct their first bit of research before you even know they are interested in buying your business. They may pose as a customer, visit your website, or come into your company to understand what it feels like to be one of your customers.

Make sure the experience your company offers a stranger is tight and consistent, and try to avoid being personally involved in finding or serving brand new customers. If a potential acquirer sees you personally as the key to wooing new customers, they’ll be concerned that business will dry up when you leave.

You may not be expecting an acquirer any time soon, but it’s never too early to ask yourself the questions an acquirer would be asking you – and your employees and customers – if he or she was thinking of buying your business.

For more free information on Creating A Business Owner’s Dream Financial Plan, you can listen to a free, eight part series we did exclusively for business owners. The show is also available to subscribe to for free via iTunes.

KEY032 | How To Properly Value A Business

Scott Plaskett, CFP — Fri, 01 Feb 2013 14:51:21 +0000

How To Properly Value A Business

IN THIS EPISODE OF THE KEY TO RETIREMENT™ PODCAST…

I interview Jason Kwiatkowski, Partner at the firm Valuation Support Partners to discuss the important aspects of business valuations and why they are so important to the growth of your business.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

ITEMS MENTIONED IN THIS EPISODE

The Business Sellability Audit™ and your Sellability Score©
The KAIZEN Financial Planning Process™
Basecamp (Project management solution)
Connect with us on Google+
Connect with us on Twitter (@IRONSHIELDCFP)
Connect with us on Facebook
Canadian Wealth Protection Plans™

Alternative Investment, Mike Flux Q4/2012 (FLY ON THE WALL EPISODE)

Scott Plaskett, CFP — Tue, 29 Jan 2013 21:41:00 +0000

In this video, I speak with Mike Flux, VP of Connor Clark & Lunn Private Capital to provide an update on the alternative strategies that they are using in their portfolios, to help reduce the effects of the current volatility without sacrificing returns.

Core Strategy, Mike Flux Q4/2012 (FLY ON THE WALL EPISODE)

Scott Plaskett, CFP — Tue, 29 Jan 2013 21:23:00 +0000

In this video, I speak with Mike Flux, VP of Connor Clark & Lunn Private Capital to chat about their investment outlook.

We also discuss how to interpret the current events, and how to properly position portfolios to take advantage of these market events. He shares a very well thought out discipline approach to investing in today’s environment.

8 Questions You’ll Be Asked When Selling Your Business

Scott Plaskett, CFP — Fri, 25 Jan 2013 02:33:00 +0000

Reprinted With Permission From Built To Sell Inc.

One of the most intimidating aspects of selling your business can be facing the barrage of questions during the various management presentations you’ll be doing for potential acquirers. Be prepared to be grilled on all facets of your operations.

Of course every meeting will be different, but here are some questions you can expect to be asked when you’re in the hot seat:

1. Why do you want to sell your business?

It’s a slippery question because if your business truly does have a bright future—and you want the buyer to believe that’s the case—the obvious question is: “Why do you want to sell it, and why do you want to sell it now?”

2. What is your cost per new customer acquired?

The potential acquirer wants to find out if you have a predictable, economical and scalable formula for finding new customers.

3. What is your market penetration rate?

The acquirer, with an eye to future growth, is trying to understand how big the potential market is for your product or service and what part of the field remains to be harvested.

4. Who are the critical members of your team?

The acquirer wants to understand the breadth and depth of your team and determine specifically which members need to be motivated and retained post-purchase.

5. Who buys what you sell?

Strategic buyers will be searching for any possible synergies between what you sell and what they sell. The more you know about your customer demographics, the better the buyer will be able to assess the strategic fit. If your customers are other businesses, a buyer will want to know what functional role (e.g., training manager, VP of sales and marketing) buys your product or service.

6. How do you make what you sell?

This question is asked in an effort to size up the uniqueness of your formula for creating your product or service. Potential buyers want to know if you have any proprietary systems that would be hard for a competitor to replicate. For various reasons, they will also want to understand if the creation of your product or service is dependent on any one person.

7. What makes your product truly unique?

A buyer is trying to understand how big the moat is around your business and what kind of protection it offers from competitors who may decide to compete with you in the future. What have you done to safeguard yourself against the competition?

8. Can you describe your back-office setup?

Most buyers will try to understand how easily they can integrate your back office into their operation. They’ll want to know what bookkeeping and billing software you use, how customers pay, and how you pay suppliers.

Of course this is not an exhaustive list, but it’s a good start when you’re preparing to represent your company to your potential buyers.

Living Benefits Update, Jennifer Jacobs (FLY ON THE WALL EPISODE)

Scott Plaskett, CFP — Fri, 14 Dec 2012 23:38:00 +0000

In this video, I speak to Jennifer Jacobs, President of LTCI Consulting Inc. to chat about the expectation of changes of living benefits / life insurance, in terms of what we see in the market place and what we can do to take advantage on what is available today.

7 things to do before signing a Letter of Intent to sell your business

Scott Plaskett, CFP — Tue, 04 Dec 2012 19:03:00 +0000

You may be years away from selling your business, but it’s never too early to understand what the process involves.

If you have ever promised your child a treat in return for good behaviour, you know all about negotiating leverage. When selling an attractive business, you also have leverage—but only up to the point where you sign a letter of intent (LOI), which almost always includes a “no shop” clause requiring you to terminate discussions with other potential buyers while your newfound “fiancé” does due diligence.

After you sign the LOI, however, the balance of power in the negotiation swings heavily in favour of the buyer, who can then take their time investigating your company. At the same time, with each passing day, you will likely become more psychologically committed to selling your business. Savvy buyers know this and can drag out diligence for months, coming up with things that justify lowering their offer price or demanding better terms.

With your leverage diminished and other suitors sidelined, you are then left with the unattractive options of either accepting the inferior terms or walking away.

Here are seven things you can do—before you even put your business up for sale, and before signing an LOI—to minimize the chances of your deal dragging on for months and becoming watered down:

1. Make sure your customer contracts have “successor” clauses.

Have customers sign long-term, standardized contracts, including a clause stating that the obligations of the contract survive any change in company ownership.

2. Nurture and prepare a group of 10 to 15 “reference-able” customers.

Acquirers will want to ask your customers why they do business with you and not your competitors. Before you sign the LOI, cultivate a group of customers to act as references.

3. Ensure your management team is all on the same page.

During due diligence, acquirers will want to interview your managers without you in the room. They want to find out if everyone in your company is pulling in the same direction.

4. Consider getting audited financials.

An acquirer will have more confidence in your numbers and will perceive less risk if your books are audited by a recognized accounting firm.

5. Disclose the risks up front.

Every company has some risk factors. Disclose any legal or accounting hiccups before you sign the LOI.

Why not find out now if your business is sellable?

This free online tool is the only no-risk step you can take to determine if your business is ready to get full value. Fast-track your analysis by taking advantage of this free, no-obligation free online tool.

This Sellability Score you instantly receive is a critical component to any business owner’s complete financial plan and is something that, until now, we have only made available to existing clients.

However, we recognized that there is value in knowing in advance of working with a financial planner whether or not your largest asset is ready to be exchanged for your retirement nest egg. Our view is that you are better to learn more about your businesses sellability today and find out how your business scores on the eight key attributes so that you can ensure you obtain full value.

If your business part of your retirement plan, finding out your sellability score will be the best 10 min. you could ever spend working “on” your business.

KEY031 | Creating a Business Owners Dream Financial Plan – Your Hiring Plan (Have Your Team Work While You Sleep) Part 8 of 8

Scott Plaskett, CFP — Sat, 01 Dec 2012 18:38:20 +0000

Creating a Business Owners Dream Financial Plan – Your Hiring Plan (Have Your Team Work While You Sleep) Part 8 of 8

IN THIS EPISODE OF THE KEY TO RETIREMENT™ PODCAST…

I reveal how a business owner can hire a support team that works while the business owner sleeps.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

ITEMS MENTIONED IN THIS EPISODE

The Business Sellability Audit™ and your Sellability Score©
The KAIZEN Financial Planning Process™
Virtual Staff Finder: I hired my last virtual assistant using Chris Ducker’s service. What a great experience. I interviewed three candidates via Skype and couldn’t decide between two of them. A good problem to have. We have had a great experience with this company from day one.
Free Consumer Awareness Guide – How To Choose And Work With A Financial Planner You Can Trust
The Strategic Coach: This is the greatest general business coaching program I have ever been involved with. At the time of this post, I am entering my 15th year. Awesome!
Basecamp (Project management solution)
Connect with us on Google+
Connect with us on Twitter (@IRONSHIELDCFP)
Connect with us on Facebook
Canadian Wealth Protection Plans™

KEY030 | Creating a Business Owners Dream Financial Plan – Turn Key Automated Marketing For Your Small Business That Really Works (Part 7 of 8)

Scott Plaskett, CFP — Thu, 15 Nov 2012 17:33:16 +0000

Creating a Business Owners Dream Financial Plan (Part 7 of 8) – Turn Key Automated Marketing For Your Small Business That Really Works

IN THIS EPISODE OF THE KEY TO RETIREMENT™ PODCAST…

I move on to part 7 of creating a business owners dream financial plan. Automating the life line of your business – lead generation. Learn this turn key approach that allows you to generate high quality leads even while you sleep.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

ITEMS MENTIONED IN THIS EPISODE

Three Pillars To Successful RRIF Investing

Scott Plaskett, CFP — Mon, 12 Nov 2012 03:35:00 +0000

When building an investment portfolio for retirees, there are three criteria that when met, will provide you with the highest probability of success.

Now, most articles being written today about investing for income are all focusing on the income distributions, yield and consistency of both. The problem is that if you don’t apply these three pillars to successful RRIF investing to those strategies, you will be accepting more risk than is appropriate for your age and stage of life because no matter how you slice it, when you are investing in a low interest rate environment, the only way to increase the yield or distributions are to take on more risk. Plain and simple.

The problem with this approach is that the risk is hidden and will only reare it’s ugly head when you can’t afford it to. Focusing on these three pillars to successful RRIF investing will provide you with an investment solution that is providing you with the highest probability of success to protect and preserve your RRIF portfolio.

Quality Management

How do you rate an investment manager? If your answer is by historical rate of return then you are potentially setting yourself up for failure. As I always say, live by return, die by return. Don’t focus solely on return, focus on consistency of return and you’ll be more inclined to stick with your discipline as opposed to make an emotional decision at the wrong time in the economic cycle.

Here is an example of how to determine if your investment manager is providing you with quality management. (NOTE: I will not be promoting an investment solution in this post, only the methodology for you to use in order to assess your own portfolio. However, these are actual audited numbers for one of our favoured Canadian investment counsellors – they are not made up)

Availability of Tools To Those Managers
Attention To Fees

Six Reasons You May Want To Sell Your Business Now…

Scott Plaskett, CFP — Tue, 06 Nov 2012 00:20:00 +0000

Is Now the Time To Sell Your Business?

Have you been thinking about selling your business but just can’t decide if now is the best time? Do you find yourself repeatedly analyzing the economic situation and wishing you had a crystal ball? There are positive signs and there are negative signs….

If you’re still up in the air and can’t quite decide whether or not to hit the eject button, here are six reasons you might want to consider getting out now.

1. You’re less interested in fighting the good fight

A lot of business owners took the Great Recession in the teeth. If you’ve got your business stabilized and the prospect of possibly having to fight through another recession leaves you panic-stricken, it could be time for you to get out.

2. The worst is behind you

Let’s say you were mentally ready to consider selling a few years ago and then 2008 hit, and in 2009 you made cuts and adjustments, and now you’re seeing some profit and revenue growth. With your numbers going in the right direction, now might be just the right time to make your move.

3. The tax man is coming

Governments around the world are looking for money to fund the cost of an aging population. At some point this will mean increased taxes.

4. Nobody is lucky forever

If you’re lucky enough to be in a business that actually benefits from a bad economy, congratulations… you’ve probably just had the four best years of your business life. But no cycle lasts forever and right now might be a great time to take some chips off the table.

5. The coming glut

As a business owner, demographics are not on your side. As the baby boomers start to retire in droves, we’re going to have a glut of small businesses coming on the market. That’s great if you’re buying; but if you’re a seller, you may want to avoid the flood and head for higher ground now.

6. The closing window

Since 2008, it’s been tougher for private equity companies to raise money; so many firms had their last successful round of fundraising a number of years ago. Many of these funds have a five-year window in which to invest or they have to give the money back to the people who gave it to them. Some boutique private equity firms will make investments in companies that have at least one million dollars in pre-tax profits (larger private equity firms will not go below $3 million in EBITDA); so if you’re in the seven-figure club, you could get a bidding war going for your business among private equity buyers keen to invest their money before they have to give it back.

The bottom line is that now could be a tremendous opportunity for you to take advantage of. But, doing so could be very challenging in terms of time and effort on your part.

Why not find out now if your business is sellable?

If your business part of your retirement plan, finding out your sellability score will be the best 10 min. you could ever spend working “on” your business.

KEY029 | Creating a Business Owners Dream Financial Plan (Part 6 of 8) – Incorporate KAIZEN Into Your Financial Planning

Scott Plaskett, CFP — Thu, 01 Nov 2012 13:00:03 +0000

Creating a Business Owners Dream Financial Plan (Part 6 of 8) – Incorporate KAIZEN Into Your Financial Planning

IN THIS EPISODE OF THE KEY TO RETIREMENT™ PODCAST…

I move on to part 6 of creating a business owners dream financial plan. Incorporating “KAIZEN” into your financial plan is the key to meeting (and often times exceeding) your financial goals. Business owners who don’t embrace this philosophy in their financial planning will live to regret it.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

ITEMS MENTIONED IN THIS EPISODE

KEY028 | Creating a Business Owners Dream Financial Plan – How to invest for business owners (Part 5 of 8)

Scott Plaskett, CFP — Thu, 25 Oct 2012 20:21:38 +0000

Creating a Business Owners Dream Financial Plan – Investing For Business Owners (Part 5 of 8)

IN THIS EPISODE OF THE KEY TO RETIREMENT™ PODCAST…

I move on to part 5 of creating a business owners dream financial plan. If your paperboy qualifies to invest in the same investment solutions you are currently using, you’re using the wrong investments. This episode will dive deep into the most appropriate investment solutions for business owners and entrepreneurs.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

ITEMS MENTIONED IN THIS EPISODE

The Three Pillars Of Investment Success

Scott Plaskett, CFP — Thu, 25 Oct 2012 01:38:00 +0000

Talented management.

Available tools.

Lower management fees.

5 RRIF Strategies For Retirees

Scott Plaskett, CFP — Sat, 20 Oct 2012 16:55:00 +0000

Like many Canadians approaching retirement, you probably have an RRSP that you have been contributing to and managing for years. However, that magical date where you turn 71 and have to convert your RRSP to a RRIF is quickly approaching. Now you need to know more about Registered Retirement Income Fund (RRIF) strategies as opposed to savings strategies that have been directing the management of your Registered Retirement Savings Plan (RRSP).

Here is what you need to know so that you can take full advantage of a RRIF?

5 RRIF Strategies For Retirees

1. Proper RRIF Wealth Accumulation Strategies

Your investment plan doesn’t need to change drastically just because you are converting your RRSP to a RRIF. But, there is one critical trait that all of the investments in your RRIF need to share to protect you from a negative experience – accessability.

I’ll get into the rules pertaining to RRIFs in a minute but always keep in mind that you will need to make sure that all of the investments in your RRIF are easily converted to cash if you want to use the RRIF withdrawal as a retirement income.

Investing in investment solutions that are somewhat illiquid or carry redemption penalties or that can attract tax-clawbacks are investment you will want to avoid in your RRIF.

Here are some examples of investments to avoid in your RRIF:

Labour Sponsoured Investment Funds – a redemption from these types of funds prior to the claw-back period for the tax credits will attract a very nasty tax bill.

Private Equity – this asset class is a lot less liquid and therefore if you need income from your RRIF and can’t sell your shares of private equity, you may be strapped for cash.

Deferred Sales Charge (DSC) Mutual Funds – if you’ve amassed over $100,000 in liquid wealth and you are still investing in DSC mutual funds, you need to reconsider your investment plan. These investments carry with them steep redemption fees and if you are required to redeem out of these funds to meet your cash requirements, you will be forced to incur this steep penalty fee.

2. What are the rules around converting to a RRIF?

As you approach retirement, it is important to know the rules surrounding the conversion of an RRSP to a RRIF.

In essence, the rules state that you will need to convert your RRSP to a RRIF by December 31st of the year in which you turn 71.

So, what this entails is completeing and signing a new application form with the company who you will be opening up the RRIF with (in most cases it’s the same company who you hold your RRSP with) to open up a RRIF account and then preparing and signing a Transfer Authorization For Registered Investments Form to transfer your RRSP to your RRIF either “in kind” or “in cash”. In Kind transfers are simply the transfer of your portfolio “as is” and an in cash transfer is as it suggests, a transfer of the value of the RRSP portfolio in cash.

These two forms are required because they will allow you to transfer the funds from your RRSP to your RRIF on a tax-sheltered basis. NOTE: If you redeem the funds from your RRSP expecting to be able to then deposit them into a RRIF, you will be taxed on the RRSP withdrawal and will not be able to contribute to the RRIF because new contributions are not allowed to RRIFs.

This takes care of the transfer of your RRSP to your RRIF but you haven’t yet received your first payment. So, on the RRIF Application you will indicated how and when you would like to receive your first payment.

The rules state that a minimum amount of income needs to be withdrawn and de-registered from your RRIF each year. This minimum amount (known as a RRIF Minimum) is calculated each year by the RRIF administrator.

If your goal is to defer the income from coming out of your RRIF for as long as possible then here is what you can do.

Convert your RRSP to a RRIF by December 31st of the year you turn 71.

Request an annual withdrawal from your RRIF for your RRIF Minimum.

Request your annual withdrawal be paid to you in December of the first year you need to make your withdrawal (i.e. the next year). This will allow you to receive your first withdrawal at the end of the year you turn 72 – a full extra year of tax-sheltered growth.

If your spouse is younger than you, elect to have the RRIF Minimum amount calculated based on their age which in turn will reduce the amount that is required to be withdrawn.

3. What are the best investment practices to investing your RRIF?

I touched on it briefly earlier in the post but in general, your investment plan does not need to change very much when you convert to a RRIF from the plan you were following in your RRSP.

Think about it this way. What is the most appropriate investment profile for an investor who has a 15 – 25 year time horizon. it’s probably not too far off of the investment risk profile you are currently using in your RRSP.

But, here are some important things to consider:

Are you maximizing your plans “tax efficiency”? Often times people have more than one registered plan (eg: Spousal RRSP, Locked-In RRSP, Regular RRSP, etc…). Having multiple plans can make it more challenging to manage as each plan is seperate from one another. Add to the proplem the fact that you may also have non-registered accounts that are not tax-sheltered and you have the potential for creating a dogs breakfast of a portfolio.

Take a wholeistic approach to the management of all of your plans to ensure tax efficiency. By determining the overall asset mix for your overall plan, you can place tax innefficient investments (bonds and GIC’s) in your registered accounts and tax efficient investments (dividend producing or capital gain generating securities) in your non-registered accounts. That way when a dividend or capital gain is realized in your portfolio, you receive the tax efficiency that these investments offer and when an interest payment is made from the fixed income side of your portfolio (i.e. bonds and GICs) this innefficient form of income is tax sheltered within the plan.

Finding investment solutions that truly allow you to manage your overall plan from this high level can often times be difficult. Retail mutual funds often times don’t allow for the level of tax efficiency needed to obtain a high level of tax savings.

4. How should you schedule your RRIF withdrawal?

There is a lot of debate as to whether you should take a monthly withdrawal, quarterly withdrawal, semi-annual withdrawal or annual withdrawal from your RRIF. And, as in most financial planning strategies, the answer lies in the term – it depends.

It depends on your unique circumstances but one simple over-riding rule tends to apply in this situation.

The longer the funds stay in the tax-sheltered plan, the more growth you will receive.

My suggestion is to match your withdrawal frequency to your needs. If you need the RRIF payment to be part of your monthly cash flow then set it up for a monthly withdrawal.

If other forms of income are already taking care of your monthly cash flow requirements then set it up as an annual withdrawal and consider (if you really don’t need the funds for cash flow purposes) re-investing the funds into your non-registered investment portfolio (or better yet, into a CRA approved Wealth Protection Plan to gain further tax sheltering on the funds).

5. RRIF Beneficiaries and Taxes.

One of the biggest mistakes people make when they set up their own RRIFs either through a discount brokerage account or through the tellor at their bank is they forget to realize that the beneficiary election that they had on their RRSP will not carry over to the new RRIF. There have been some very heated court cases that illustrate the importance of paying attention to the details – and this detail is important. Make sure you name a beneficiary on your RRIF.

Here is a listing of the types of beneficiaries you can list on your RRIF and their accompanying tax treatment:

Spouse: Tax free rollover.

Child: Balance of the RRIF is included in the annuitants final years tax return and then tax is paid on this as if it were income for the year.

Relative: Balance of the RRIF is included in the annuitants final years tax return and then tax is paid on this as if it were income for the year.

Charity: Balance of the RRIF is included in the annuitants final years tax return and then offset by a charitable receipt little to no tax is paid on the balance of the account.

Hopefully this post has taken the mystery out of Registered Retirement Income Funds.

Other information you may be interested in receiving:

FLY ON THE WALL UPDATE: Alternative Investments Q3/2012

Scott Plaskett, CFP — Mon, 15 Oct 2012 21:54:00 +0000

In this video, I speak with Mike Flux, VP Connor, Clark & Lunn Private Capital to get an update on the Alternative Asset Classes they offer (Commercial Real Estate, Infrastructure and Private Equity).

This video will provide a plain english update on three of the most exciting investment categories available as a complement to a well diversified portfolio.

FLY ON THE WALL UPDATE: Investment Review and Market Outlook Q3/2012

Scott Plaskett, CFP — Mon, 15 Oct 2012 21:50:00 +0000

I invited Mike Flux, VP of Connor Clark & Lunn Private Capital to summarize for me what has happened in the global markets during the 3rd quarter of 2012.

He not only explains what happened but explains what their strategy is moving forward.

Three Key’s To Successful Curb Appeal For Your Business

Scott Plaskett, CFP — Sat, 06 Oct 2012 00:04:00 +0000

Does Your Business Have Curb Appeal?

Let’s say you’re in the market for buying a house and you go to view one that looks appealing in the ad. How does it look on the inside? The outside? What about the location? What is your general impression?

Like your house, your business projects an image to potential buyers. When they come to see your business for the first time, your “curb appeal” can attract a buyer to your business—or cause them to walk away from it.

Do you need to improve your curb appeal?

Here’s a three-step plan:

1. Fix Your Leaky Faucets

Perhaps, like many other business owners, you started your business from scratch with one or two employees and now you have 20 people working for you. But do you have the appropriate HR infrastructure in place for that size of a company? Perhaps you even take pride in your informal management style, but it can prove to be a liability when it comes time to sell.

Make sure your human resources policies are at least as stringent as those of the company you hope will buy your business. Some basics to have in place:

A written policy making it clear you forbid any form of harassment or discrimination;
A written letter of employment for each staff member;
A written description of your bonus system;
Written policies for employee expenses, travel and benefits.

2. Assemble Your Binder

When you go to buy a house, it will give you confidence if the owner has the instruction manuals for the appliances, information on where they were purchased, and who to call if one of them breaks down.

Similarly, when a potential buyer looks at your company, he wants to see that you have your business information in order. Documenting your office procedures, core processes, and other intellectual capital can help you attract more bidders and a higher price for your company, while also lowering the chance of the deal falling apart during diligence.

If you want to attract a buyer one day, your business needs a binder with instructions for basic functions, such as:

Opening up in the morning and closing down at night;
Forms and step-by-step instructions for routine tasks;
Templates for key documents;
Emergency numbers for service providers;
Billing procedures for customers.
How your company is positioned in the market and your marketing tools.

3. Document Your Intangibles

Intangibles for house buying might include:

Is the house near a good school or daycare?
What kind of neighbourhood is it?
What kind of commute are you looking at to get to work?

Your business also has intangible, often intellectual, assets that a potential buyer needs to be made aware of, such as:

Proprietary research you’ve conducted;
A formula for acquiring new customers;
Criteria you use to evaluate a potential new location;
Your unique approach to satisfying a customer.

As with selling a house, your company’s curb appeal can go a long way toward closing a deal.

Make Retirement the Time of Your Life: Ask Yourself Three Questions

Scott Plaskett, CFP — Mon, 01 Oct 2012 18:09:00 +0000

You’ve spent years in anticipation of retirement – now that it’s around the corner, it’s time to realize there’s more to retirement planning than just financial security.

If you’re only saving for basic living expenses once you retire, then you may want to revisit your plan.

Retirement should allow you to pursue your interests and dreams. Take the time to sit down and decide whether or not you are saving enough to fully embrace life after work.

Consider this: the average Canadian now lives to about 80 according to Statistics Canada. That means you’ll have between 15 and 20 years outside of full-time employment. That’s a lot of time and you want to make sure you’re prepared financially to enjoy yourself, not just live day by day.

Ask yourself a few key questions to help you decide whether you’re on the right track to make the most of the rest of your life after retirement:

How will you spend your time?

Looking at retirement as an extended holiday might work for a while – but don’t leave yourself open to boredom. Are there any new skills you want to learn? Or passions you have not had time to pursue because of your work schedule? Taking a course or signing up for lessons to learn a new skill can not only add some structure to life post-retirement, it can help you find inspiration in something new.

Incorporate “mini retirements” into your lifestyle to really allow yourself to dive into what it would be like during retirement. I call it The Retirement Trick and I did a full radio show on the topic so click here to listen to a re-broadcast of the show for free, online now.

Where do you want to live?

This is something you want to consider before you retire. If you plan to divide your time between cottage and city or, say, Florida and Canada then some up-front financial planning can help you determine what’s realistic and how to make it happen. While you might not have enough money to buy that beachfront condo in Sarasota, you could set aside money to rent your dream place for a few months every winter.

Am I ready to stop working?

If you’re nervous about taking a giant leap into retirement, try baby steps instead. Talk to your employer about shifting to part-time in order to make the transition easier. Or, there may be opportunities for contract or freelance work, either with your employer or someone else – keep an open mind. You may still have your best work years ahead of you.

Financial planning is the key. It always has been and always will be.

KEY027 | Creating a Business Owners Dream Financial Plan – For Business Owners, It’s Different (Part 4 of 8)

Scott Plaskett, CFP — Mon, 01 Oct 2012 14:18:04 +0000

Creating a Business Owners Dream Financial Plan – For Business Owners, It’s Different (Part 4 of 8)

WELCOME TO THE KEY TO RETIREMENT™ PODCAST!

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

IN THIS EPISODE

In this episode, I move on to part 4 of creating a business owners dream financial plan. If the financial planning strategies that you’re using are appropriate for your employees, you’re probably utilizing the wrong strategies.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

ITEMS MENTIONED IN THIS EPISODE

VIDEO LINK

Suze Orman’s $25,000 Mistake…

The Key To A Successful Canadian Retirement

Scott Plaskett, CFP — Wed, 26 Sep 2012 04:58:00 +0000

I have recognized that there is one single problem facing Canadians today (really, it’s not just Canadians but for this post, I’ll only discuss issues that relate to Canadians) and this problem, is irratic, irrational and unpredictable.

government decisions to keep interest rates low – they are artificially low to keep the economy moving but there will come a day that we can’t hold them down any longer and then inflation will go through the roof.

governments are focusing on removing tax-exempt strategies – take advantage of what is available now – otherwise you will lose the opportunity.

regulators are changing the rules on the insurance industry forcing them to either close their doors or to increase rates.

financial community is focused in embedded commissions and people aren’t getting value for what their advisor is receiving in most cases.

(the problem is government decisions)

So, what is the key to retiring in Canada – you guessed it – working with a Canadian financial planner you can trust.

Tax Free Savings Accounts and Deferred Sales Charges

Scott Plaskett, CFP — Thu, 20 Sep 2012 18:00:00 +0000

There is a potential time bomb lurking in Tax Free Savings Accounts (TFSA) that have investments in them that were purchased using a Deferred Sales Charge (DSC) compensation model.

When I did the math on this, it just reinforced my rationale for encouraging advisors to invest their clients money using no-load investments.

The best way to illustrate this issue is by way of an example.

Mary has a TFSA worth $25,000. She purchased her investments in the TFSA on a DSC basis.

(NOTE: DSC simply means that you as the purchaser are not charged a fee up front to purchase the investments and the advisor who sold the investment to you is paid a commission from the investment company for placing your investments with that company. If you redeem these funds prior the the expiration of the DSC schedule, you as the investor will have to pay all or part of the commission initially paid to the advisor, back.)

Now, a few years later, she needs some money to fund a kitchen renovation. So, she redeems $25,000 from her TFSA because she knows that any withdrawals from the TFSA are considered “Tax-Free”. And, since the TFSA rules allow you to replace your withdrawal from the TFSA in a future year, she feels confident that this is the best place to redeem the cash from.

This feature of being able to re-contribute any withdrawals back into the plan in future years is one of the greatest features of the TFSA, next to its ability to grow the assets on a tax-free basis.

But, when her cheque comes in, it is for $23,750? Why is that?

Well, now we are beginning to see the negative impact of the DSC.

In this example, not only was there a 5% DSC fee that had to be paid before Mary received the funds, but when it comes time to put the money back into the TFSA, she is only able to put back $23,750 as opposed to $25,000 because the DSC fee is considered a charge to the TFSA and is not considered as part of her withdrawal. The rules state that she can re-contribute what was previously withdrawn but she only withdrew $23,750.

What happens to the $1,250 in room that she looses? She looses it forever…

So, when you are purchasing your investments, make sure you are clear on the load structure of the investments. If the load structure is DSC, you want to really understand why this is in your best interest.

KEY026 | Creating a Business Owners Dream Financial Plan – The Sellability Score© and The Business Sellability Audit™ (Part 3 of 8)

Scott Plaskett, CFP — Sat, 15 Sep 2012 13:00:32 +0000

Creating a Business Owners Dream Financial Plan – The Sellability Score© and The Business Sellability Audit™ (Part 3 of 8)

WELCOME TO THE KEY TO RETIREMENT™ PODCAST!

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

IN THIS EPISODE

In this episode, I move on to part 3 of creating a business owners dream financial plan. I dive into the Sellability Score to help you build a business that can thrive without you.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

ITEMS MENTIONED IN THIS EPISODE

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KEY025 | Creating a Business Owners Dream Financial Plan – Not Net Worth, Liquid Net Worth! (Part 2 of 8)

Scott Plaskett, CFP — Sun, 09 Sep 2012 12:37:31 +0000

Creating a Business Owners Dream Financial Plan – Not Net Worth, Liquid Net Worth! (Part 2 of 8)

WELCOME TO THE KEY TO RETIREMENT™ PODCAST!

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

IN THIS EPISODE

In this episode, I move on to part 2 of creating a business owners dream financial plan. I dive into why most business owners and entrepreneurs can’t retire and what you can do about it today to change this harsh reality.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

ITEMS MENTIONED IN THIS EPISODE

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Why Your Financial Plan is Missing the Mark (And How You Can Fix It)

Scott Plaskett, CFP — Thu, 06 Sep 2012 18:00:00 +0000

So, why is your financial plan missing the mark? Every month you’re putting money aside, investing in the top mutual funds you can find, not putting all your eggs in one basket – doing the right things. But, you still feel like you’re falling short of your goals.

You’re worry factor is high. Consuming financial news via radio, internet and social media doesn’t help – it’s all bad news and usually difficult to follow. Your confidence is low. But why? You have a finanical plan and isn’t that the first step to financial success?

The answer, unfortunately, is very simple.

You, like 1 in 5 Canadians, don’t have a financial plan. And, even if you’re working with a financial advisor, the likelyhood of you having a comprehensive financial plan are slim to none.

Unfortunatley, financial planning somehow turned from an advisory process to a marketing process for advisors to acquire more assets to manage and more insurance to sell. The plan was used to encourage a product sale instead of being a roadmap to rely upon.

Free financial plans have singlehandedly done more to harm the financial industry than anything.

Mutual fund companies have supported this movement by offering advisors free financial planning software to use to prepare a pretty weighty document to give away in exchange for investing clients money in that companies mutual funds.

This practice of offering a free finanical plan has done nothing but de-value and commodotize the finanical planning process. Which is a shame because financial planning is the key, it always has been and always will be. But, when an industry is built on product sales and not advice, you tend to get what you pay for.

So, how do you know if the plan you have is a comprehensive financial plan or simply prepared to entice you to invest with the advisor you're working with?

Just ask yourself these questions:

Did you sign a Letter of Engagement with your financial planner before you began working with them?
Did you pay a fee, separate from the implementation of your financial plan, for the financial planning services?
Does your plan tell you what your Attainable Income is in retirement?
Does your plan tell you what your Attainable Retirement Age is?
Does your plan tell you what your required rate of return is?
Does your financial plan incorporate "KAIZEN" a.k.a. Constent and never ending improvement?

If you answerd NO to any of these questions, the reality is that you don't have a finanical plan.

A Certified Financial Planner is required to have you sign a Letter of Engagement to clearly outline for you what services they will provide, what costs are involved, what conflicts of interest (if any) exist, what licenses are held and what everyone's responsabilities are. In my mind, it also shows that you are dealing with a professional.

Professionals charge fees for their advice. A financial planner who doesn't charge a fee for their financial planning process is a product salesperson.

A comprehensive financial plan will not only tell you whether you are on track for a specified retirement income goal, but it will also tell you what is attainable. And this, this is what we are all really curious about. What we can attain assuming certain criteria.

Trying to answer the question as to whether or not your on track without the use of a comprehensive financial plan reminds me of a conversation that Dorothy had with the Cheshire Cat in the tale, Alice in Wonderland:

Would you tell me, please, which way I ought to go from here?'
`That depends a good deal on where you want to get to,' said the Cat.
`I don't much care where--' said Alice.
`Then it doesn't matter which way you go,' said the Cat.
`--so long as I get SOMEWHERE,' Alice added as an explanation.
`Oh, you're sure to do that,' said the Cat, `if you only walk long enough.'"

You need to know where you want to get to before you can assess whether or not you are hitting the mark. Your goal becomes your benchmark. Your comprehensive finanical plan becomes your compass. You need to know what you can attain based on what you are prepared to do to properly assess whether or not you are willing to change your ways.

A financial plan that has the ability and sophistication to determine what is attainable is a powerful solution. And please, don't take this statement lightly.

Finding a finanical planner that has the ability to do this type of calculation is difficult. It's difficult because the free finanical planning software doesn't run this type of calculation - it's too sophisticated. A certified finanical planner who understands the power of the "attainable" calculation will take the time and spend the money to learn and purchase the most powerful software that can meet these finanical planning demands. They're not cheap solutions but they are better solutions.

Finanical planning is all about answering your questions and helping you attain your goals - not the advisor's.

And finally, the incorporation of KAIZEN (a Japanese term for "constant and never ending improvement") is critical to your long term financial planning success. Simply put, it's the re-visiting and updating of your assumptions and never ending tweaking and improving to ensure your calculations are as reliable as possible. This can only be accomplished by regular reviews.

When was the last time you re-calibrated your financial plan to account for the current economic environment? If you answer is anything longer than 12 months, you are not reviewing it often enough and are not taking advantage of KAIZEN.

KAIZEN Finanical Planning is being recognized as a reliable way of keeping on top of your financial plan. Incorporating KAIZEN into your finanical planning will surely keep you on the right track - that is once you know what the track is you want to run on.

Financial planning is the key, it always has been and always will be.

The C-word and 7 Others That Entrepreneur’s Should Avoid…

Scott Plaskett, CFP — Wed, 05 Sep 2012 01:22:00 +0000

The majority of businesses in Canada today started out as service companies. If you want to own a web design firm, you didn’t need a lot of money, just a technical knack. Enterprising professionals who know how to get the media’s attention can start their own pubic relations firms without much more than a mobile phone. No capital required.

But if you want to build a valuable company – one you can sell – you’ll want to stop presenting yourself as a service firm. Consultancies are not usually valuable businesses, because acquirers generally view them as a collection of people who peddle their time on a hamster wheel. The typical way to sell a consultancy is for the consultants themselves to trade their equity for a job, in the form of an earn-out that may or may not have an upside.

If you want to build a valuable company consider re-positioning your business out of the ‘consultancy’ box. Depending on your business, you may need to change your business model and ‘productize’ your service. One of the first things to do is to stop using consulting company terminology and replace it with the terminology of a valuable business:

Consultancy

Defining your company as a ‘consultancy’ will announce to the market you are a collection of people who have banded together around an area of expertise. Consultancies rarely get acquired, and when they do, it is usually with an earn-out. Replace ‘consultancy’ with ‘business’ or ‘company’.

Engagement

An engagement is something that happens before two people get married; therefore, using the word in a business context reinforces the people-dependent nature of your company. Replace the word ‘engagement’ with ‘contract’, and you’ll sound a lot more like a business with some lasting value.

Deck

A deck is a place to have a glass of wine. It’s not a word to use to describe a PowerPoint presentation unless you want to look like a ‘consultancy’.

Consultant

Instead of describing yourself using the vague term ‘consultant’, describe what you consult on. If you are a search engine optimization consultant, who has developed a methodology for improving a website’s natural search performance, say you ‘run an SEO company’ or ‘help companies improve their ranking on search engines, such as Google’.

Deliverables

Consultants promise ‘deliverables’. The rest of the world guarantees the features and benefits of their product or service.

Associate, engagement manager, partner

If you refer to your employees with the telltale labels of a consultancy, consider replacing ‘associate’, ‘engagement manager’ and ‘partner’ with titles like ‘manager’,” ‘director’ and ‘vice-president’, and you’ll reduce the chance of your customers expecting a bill calculated at 10-minute increments.

Clients

The word ‘client’ implies a sense of hierarchy in which service providers serve at the pleasure of their client. Companies with ‘clients’ are usually prepared to do just about anything to serve their clients’ needs, which sounds great to clients, but also telegraphs to outsiders that you customize your work to a point where you have no leverage or scalability in your business model. Would your ‘clients’ really care if you started referring to them as ‘customers’?

It’s easy to get stuck in a low-growth consulting company. ‘Clients’ expect to deal with a ‘partner’ on their ‘engagements’, so the business stalls when the partners run out of time to sell. If a company ever decides it wants to buy your consultancy, acquirers will know they have to tie up the partners on an earn-out, to transfer any of the value. When it comes to the value of your business, optics matter and the first step in avoiding the consulting company valuation discount is to stop using the lingo.

Financial planning for business owners is different. Following the same traditional financial planning methods appropriate for your employees will lead you down the wrong path. Your business is where your wealth is and planning how to access that wealth when it comes time to retire is key.

Wondering if you have a sellable business? The Sellability Score® is a quantitative tool designed to analyze how sellable your business is. After completing the questionnaire, you will immediately receive a Sellability Score out of 100 along with instructions for interpreting your results.

Take the Quiz here: The Business Sellability Audit

KEY024 | Creating a Business Owners Dream Financial Plan – Start With Your Base Plan (Part 1 of 8)

Scott Plaskett, CFP — Wed, 15 Aug 2012 13:00:50 +0000

Creating a Business Owners Dream Financial Plan – Start With Your Base Plan

WELCOME TO THE KEY TO RETIREMENT™ PODCAST!

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

IN THIS EPISODE

In this episode, I highlight part 1 of creating a business owners dream financial plan. I discuss creating your BASE PLAN.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

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FLY ON THE WALL UPDATE: Alternative Investments Q2/2012

Scott Plaskett, CFP — Fri, 10 Aug 2012 17:55:00 +0000

This video will provide a plain english update on three of the most exciting investment categories available as a complement to a well diversified portfolio.

The video is about 19 minutes long…

Why do you want to sell your business?

Scott Plaskett, CFP — Wed, 08 Aug 2012 16:40:00 +0000

Many business owners believe the act of selling their business is similar to passing the baton in a 400 metre relay: once you’re finished running, you get to relax. In reality, buyers will insist that you stay on for a transition period – anywhere from six months to five years – during which time you continue to work in your business to help the buyer capitalize on the investment they’re making.

THE Question

At some point in the process of selling your business, a prospective buyer will ask you – usually quite casually – “Why do you want to sell your business?” These eight seemingly innocuous words have derailed more deals than any others.

Buyers ask THE question to evaluate how likely and willing you are to stay on or if you already have one foot out the door.

Obviously you don’t want to lie, but there is a right and wrong way to answer THE question. Answers like “I want to slow down a bit” or “I want to travel” or “we’ve got a baby on the way and I want to spend more time at home” communicate to a potential buyer that you plan on winding down when they take over. However, what they want to hear is your intention to help them realise the potential locked inside your business.

Here are some suggested responses based on your age.

If you’re under 40, you clearly aren’t ready to “retire” so you need to communicate that you see an upside in merging your business with theirs:

“In order for us to get to the next level, we need to find a partner with more .”

If you’re between 40-55 years old, most people will understand the need to shore up your personal balance sheet:

“I’ve reached a time in my life where I want to create some liquidity from the value I’ve created so far, and at the same time I want to find a partner who can help us get to the next level.”

If you’re over 55, you can start to talk about retirement, but you want to make sure you communicate that you still have lots of energy and passion for your business.

“I’m at a stage where I need to start thinking about retirement. It’s a long way off yet, but I want to be proactive.”

Rehearse your answer to THE question so it becomes a natural response when you are inevitably asked THE question by a potential buyer.

Take the Quiz here: The Business Sellability Audit

FLY ON THE WALL UPDATE: The Evolution Of Group Benefits with Roger Thorpe

Scott Plaskett, CFP — Wed, 01 Aug 2012 18:00:00 +0000

In this episode, I interview Roger Thorpe, President of Thorpe Benefits and we have an in-depth discussion about Employee Benefits. Roger reveals to us his perspective on how business owners can better utilize their group benefits plans to enhance their employee experience.

If you’re a business owner looking for a group benefits plan for your company, you will want to listen to this episode.

Free Items Mentioned In This Episode:

Group Benefits Consultant Evaluation Checklist

FLY ON THE WALL UPDATE: Investment Review & Market Outlook: Q2/2012

Scott Plaskett, CFP — Wed, 01 Aug 2012 16:57:00 +0000

Hello everybody and welcome to another one of IRONSHIELD Financial Planning’s “Fly On The Wall” webinars.

If this is your first time tuning in to a Fly On The Wall recording, let me quickly explain to you what this is.

You are going to experience what it’s like to be a “fly on the wall” during one of my update calls with a member of our Top Guns Network. This network is my personal network of specialists.

Every so often, I ask a member of my network to touch base with me to bring me up to speed on the latest happenings in their area. And when they call me, I record the call so you can be a “fly on the wall” for that call.

On this episode

I invited Mike Flux, VP of Connor Clark & Lunn Private Capital to summarize for me what has happened in the global markets during the 2nd quarter of 2012. He not only explains what happened but explains what their strategy is moving forward.

Please click on the video link above to watch & listen to the call.

KEY023 | The Evolution Of Employee Benefits With Roger Thorpe

Scott Plaskett, CFP — Wed, 01 Aug 2012 13:00:38 +0000

The Evolution Of Employee Benefits (Interview with Roger Thorpe, President of Thorpe Benefits)

WELCOME TO THE KEY TO RETIREMENT™ PODCAST!

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If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

IN THIS EPISODE

If you’re a business owner looking for a group benefits plan for your company, you will want to listen to this episode.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

ITEMS MENTIONED IN THIS EPISODE

Free Group Benefits Evaluation Checklist – Find out how your group benefits plan consultant stacks up…
Free Consumer Awareness Guide – How To Choose And Work With A Financial Planner You Can Trust
Six Mistakes Retirees Make With Their Finances – And How To Avoid Them!
12 Key Questions You Must Ask A Financial Planner Before You Hire One!
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Connect with us on Twitter (@IRONSHIELDCFP)
Connect with us on Facebook

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KEY022 | What Everyone Ought To Know About Registered Retirement Income Funds – RRIF

Scott Plaskett, CFP — Sun, 15 Jul 2012 13:00:26 +0000

What Everyone Ought To Know About Registered Retirement Income Funds – RRIF

WELCOME TO THE KEY TO RETIREMENT™ PODCAST!

To subscribe to the podcast, please use the links below:

If you have a chance, please leave me an honest rating and review on iTunes by clicking here. It will help the show and its ranking in iTunes immensely! I appreciate it! Enjoy the show!

IN THIS EPISODE

In this episode, I reveal what everyone ought to know about Registered Retirement Income Funds (a.k.a. RRIF). I also review four RRIF strategies to consider taking advantage of and reveal a RRIF strategy, that if you decide to move forward with it my advice to you is “Proceed With Caution”.

Visit us online, at www.ironshield.ca, to obtain our contact information, then simply call or email to book your free initial meeting.

ITEMS MENTIONED IN THIS EPISODE

RRIF Calculation Tables
Free eBook “How To Choose And Work With A Financial Planner You Can Trust“
Connect with us on Google+
Connect with us on Twitter (@IRONSHIELDCFP)
Connect with us on Facebook
12 Key Questions You Must Ask A Financial Planner Before You Hire One – Free Report

EPISODE MIND MAP

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Why traditional financial planning is killing your business…

Scott Plaskett, CFP — Wed, 11 Jul 2012 15:23:00 +0000

Financial planning is critical to a comfortable retirement.

But, too many business owners are following the same financial planning strategies that their employees are following and are jeopordizing their ability to retire as a result.

Traditional planning from some very successful “barbers” say you should pay yourself first. Take 10% of each paycheque and put it into your retirement fund as the first thing you do each and every month.

For traditional employees, who have no control over the form of income they receive (i.e. they receive a salary, plus the odd bonus) this is a prudent strategy. Either put aside 10% of your monthly paycheque or run the math to determine how much you need to put aside each month to accomplish your long-term retirement income goal. Utilize an RRSP as the vehicle to put the funds into (which creates an immediate tax deduction and allows for long-term tax deferral). This is prudent financial planning – for traditional employees.

But, when you’re an employer – this could kill your business.

As an employer, you are able to choose not only how much income to receive but also what type of income to receive. And, not only that, you are able to convert a lot of personal expenses into business ones.

So, if you are a business owner and you are taking more out of your business just so you can put it aside into an RRSP, you are taking vital cash from the business, pushing your personal tax bracket up just so you can then put the remaining cashflow into your RRSP to then get an offsetting deduction to then grow the funds on a tax-deferred basis just to be forced to take the funds out of your RRSP at age 71 in the form of a RRIF to then pay tax on an even higher amount and force your overall taxable income in retirement through the roof. This doesn’t sound like the best strategy.

Prudent financial planning for business owners takes into account the following options only available for business owners to assist in their wealth accumulation in a tax-preferred way:

Income splitting with family members to keep the overall family tax burden to a minimum.
Increase tax-sheltered contribution room through the use of an Individual Pension Plan so that you can put aside more for retirement in a tax-efficient manner.
Potentially pass retirement assets to your child beneficiaries tax-free through the use of an Individual Pension Plan.
Invest surplus retirement funds corporately instead of personally so that you can keep income taxes lower on the surplus funds.
Take advantage of the Capital Dividend Account available to business owners through a properly structured Wealth Protection Plan as a way of growing and utilizing these accounts during your lifetime and transferring the residual wealth tax-free on death.

And the list goes on.

If you are a business owner, I know one thing for sure. You don’t need to take any extra risk with your retirement finances – you’re already taking a risk by being a business owner.

Bottom line is this. If you are a business owner and you are following the traditional financial planning advice that is geared toward your employees – you are missing a lot of wealth creation and protection opportunities.

Want more information on finanical planning for business owners? Click Here to be taken to our library of blog posts written directly for you.

Turning 71? Little-Known Factors That Could Affect Your RRIF Payout

Scott Plaskett, CFP — Mon, 09 Jul 2012 19:06:00 +0000

Turning 71 in Canada is one of the most important ages when it comes to registered retirement income (RRIF) planning. The decisions you will have to make in that one year will significantly impact your financial planning for retirement.

Here is a list of some little known factors that could affect your RRIF payout in retirement:

Your younger spouse’s age.
Without guidance, you’ll miss your final years tax deduction.
Using the wrong financial planning software.
Your overall asset allocation.

Managing these four items alone properly can make your transition a confident one. Making a mistake on one of them could cost you dearly.

Your Spouse’s Age

It’s your RRIF right? So, what does your spouse’s age have to do with anything? Short answer: A Lot!

Here’s why.

When you turn 71, you are required in Canada to convert your Registered Retirement Savings Plan (RRSP) into a Registered Retirement Income Fund (RRIF). This is when Canada Revenue Agency (CRA) now get’s their share of your pie.

All those years of dilligently saving into your RRSP and getting that nice tax deduction are now over. Now it’s CRA’s turn.

In essence, CRA is now requiring you to de-register a minimum amount of the balance of your plan each year and bring it into your taxable income. Now, the minimum amount you are required to remove from your plan each year is pre-determined by CRA.

But, if you have a spouse who is younger than you are, you can elect to use their age to calculate the minimum amount you are required to withdraw each year – which will be less than the pre-determined rate if you accept the default for someone turning 71.

So, if your spouse is younger than you when you turn 71 and are converting your RRSP to a RRIF, elect on the application form to use your spouse’s age to calculate the required minimum that must be de-registered each year. This will lower the amount and help to keep your overall tax bracket down.

(Further information on this can be found on my free Podcast episode titled: Is Retirement Planning Just A Waste Of Time?)

Without Guidance, You’ll Miss Your Final Year’s Tax Deduction

When you turn 71 and convert your RRSP to a RRIF, you are doing two things. One, you are setting up your plan to de-register a minimum amount to be taxed on each year and two, you are closing the door for ever on your ability to contribute to an RRSP.

OK, but there’s one problem. If you have earned income in the year you turn 71, this will generate for you RRSP contribution room that you should be able to use to help offset your next years taxable income.

But, on December 31st of the year you turn 71, you close the door on your ability to contribute to an RRSP. So, you risk losing this valuable contribution room you created with your income in the year you turned 71.

Unless you take advantage of the rules.

The RRSP rules state that you will pay a 1% penalty fee on any amount you contribute to an RRSP that exceeds your allowable overcontribution limit of $2,000. So, here is what you do.

You should be able to estimate what your earned income is for the year you turn 71 in the last month of the year (December). Take 18% of that figure (or the RRSP maximum contribution limit for the yeaar, whichever is less) – reduce it by your estimated Pension Adjustment for the year – to determine a close estimate of what you should be allowed to contribute to an RRSP in your 72nd year. Then, make that full contribution in December of the year you turn 71.

What you have done is put the funds into your RRSP (which you are allowed to do because the door on your RRSP contribution doesn’t close until December 31st of your 71st year) prior to the end of the year. Now, this will be seen as an overcontribution but it will only be so for one month. If CRA realizes this, they have the right to fine you 1% of this amount that exceeds the $2,000 overcontribution limit. But, what you have done is create an RRSP tax deduction for your next year because you are able to carry forward any unused contributions to a future year.

Deduct this amount against your income in that year. I guarantee you that the amount of your tax refund will far exceed the potential 1% penalty fee that CRA could levy on you.

Using The Wrong Finacial Planning Software

What do you mean the wrong financial planning softwar? It’s math. And, math is math. Isn’t it?

Well, sure but, using the wrong math at the wrong time will force you to make a false assumption – for simplicities sake.

Here’s what I mean.

If your finanical planning softwar (or the financial planning software that your financial advisor is using on your behalf) asks you to key in the assumed average tax rate that you expect to pay during retirement, you’re in for trouble.

You see, when you look at cash flow in retirement to the level of detail that I have, you see one key thing. You see that your cash flow changes significantly during retirement because of our tax system in Canada.

You just learned that at age 71, you must convert your RRSP to a RRIF. This means that you will now be forced to add to your other sources of income the amount that is de-registered from your RRIF – wheter you need that income or not.

In eseence, what is happening is that your tax bracket is likely going to be higher in your 72nd year onward.

Prior to that, you would have lived off of your retirement savings that were non-registered or in your Tax Free Savings Account (TFSA). This means that the income you received from these two sources would be tax preferred compared to the income you receive from the proceeds from a RRIF. So, your tax bracket leading up to at 72 will likely be lower than beyond this point.

So, if your financial planning software is asking you to average your overall tax rate during retirement, you are over taxing your early retirement years and under taxing your later retirement years.

What this does is it forces you to overcompensate by investing more during your wealth accumulation years than what is actually required.

I have a problem with this.

The problem I have is that financial planning is about assisting you to find that happy balance between living life for today and planning to have enough to fund your tomorrow. But, we are not guaranteed a tomorrow. So, if you are paying more than you need into your financial plan for tomorrow (because your finanical planning software told you you needed to), and you don’t make it to tomorrow – I see this as the equivalent of a missed living opportunity.

Perhaps it could have been some extra cash flow to take a few more trips. Or, to buy that bigger house or nicer car.

Bottom line is that those extra funds were not needed for tomorrow but you didn’t get a chance to use them today. And that is wrong.

The answer is to ensure that you (or your financial planner) is using software that produces a tax return each year based on the cash flow that is coming from the plan.

So, if you are being asked (or if your financial planner is keying in) the average tax rate to be used in your finanical planning model, you’re using the wrong software and sacrifincing too much for the tomorrow that you can’t guarantee will come.

(Check out my free Podcast episode: A Little Financial Knowledge Can Be A Dangerous Thing)

Your Overall Asset Allocation

If you’re paperboy qualifies to invest in the same investment solution that you are investing in and you have amassed at least $100,000 of liquid investable assets – you are investing in the wrong solution.

Mutual funds are great – to start out with.

But, as your wealth accumulates, so to should your investment solution. And one of the main benefits from doing so will be your ability to truly manage the asset mix of your plan.

Not the asset mix of your RRSP or your Non-registered account. But the asset mix of your overall plan which will greatly affect your tax situation.

In essence, if you are serious about wealth accumulation, you have probably invested in RRSPs and non-registered accounts. But, chances are also pretty good that you have the same asset mix for both portfolios. This is wrong.

What you should strive for is a balanced portfolio with the inefficiently taxed investments (Fixed Income – Bonds) in comprising your entire registered portfolio and all of your equity or divident producing investments comprising your non-registered portfolio.

Overall, the asset mix is still balanced but you have tax-sheltered the inefficient investments and let the tax efficient investments keep their tax efficiency. This will keep the overall return on your portfolio higher because you will be losing less to tax each year. Which we could all use more of – especially now.

Financial Planning For 60 Year Olds – BNN Interview

Scott Plaskett, CFP — Mon, 09 Jul 2012 18:00:00 +0000

Our very own Scott Plaskett, CFP was invited to The Business News Network Studio’s to discuss a very important topic:

Financial Planning for 60 year olds.

Here is a link to that video:

Scale Your Service Business To Be Less Reliant On You

Scott Plaskett, CFP — Fri, 06 Jul 2012 18:00:00 +0000

Prevention is better than cure

To grow a valuable business – one you can sell – you need to set up your company so that it is no longer reliant on you. Financial Planning for business owners is less about what you can take out of your business and more about what you can do to it so that it runs without you.

This can be easier said than done, especially when, like a PR consultant or plumber, what you are selling is your expertise.

To scale up a knowledge-based business, you first have to figure out how to impart your knowledge to your employees, so that they can deliver the goods. However it can be difficult to condense years of school and on-the-job learning into a few weeks of employee training. The more specialised your knowledge, the harder it is to hand over work to juniors.

The key to scaling up a service business can often be found by offering the service that prevents customers from having to call you in the first place. You have to shift from selling the cure to selling the prevention.

Fixing what is broken is typically a hard task to teach; however, preventing things from breaking in the first place can be a far easier task to train others to do.

For example, it takes years for a dentist to acquire the education and experience to successfully complete a root canal, but it’s relatively easy to train a hygienist to perform a regularly scheduled cleaning.

It’s almost effortless for an estate agency manager to hire someone to clean the gutters once a month, but repairing the flooded basement caused by the clogged gutters can be quite complex.

For a master car mechanic, overhauling an engine that has seized up takes years of training, but preventing the problem by regularly changing a customer’s oil is something a high school student can be taught to do.

For an IT services company, restoring a customer’s network after a virus has invaded often takes the know-how of the boss, but preventing the virus by installing and monitoring the latest software patches is something a junior can easily be trained to do.

When you’re selling your expertise, it can be tough to hire a team to do the work for you. As ironic as it sounds, sometimes the key to getting out of doing the work is to offer a preventive service, which not only maintains your business income, but also eliminates the need for someone to call you in the first place.

Wondering if you have a sellable business? The Sellability Score is a quantitative tool designed to analyze how sellable your business is. After completing the questionnaire, you will immediately receive a Sellability Score out of 100 along with instructions for interpreting your results.

Take the Quiz here: The Business Sellability Audit

MoneyVille – Couple’s rent-free in-law plan gives savings a boost

Scott Plaskett, CFP — Tue, 03 Jul 2012 17:01:00 +0000

“Couple’s rent-free in-law plan gives savings a boost” was the title for the July edition of MoneyVille’s Money Makeover and our very own Scott Plaskett, CFP was the makeover specialist.

To read the article, click on the following headline:

Couple’s rent-free in-law plan gives savings a boost

To download a copy of the article, click here.