Starting a new business in your retirement? Here’s a “Must Read”
These days retirement doesn’t always mean golf and luncheons. Many retirees are taking their years of experience and applying them to starting and running their own business. Sometimes those new entrepreneurs run into trouble because although they have great skills, they don’t have all the business skills needed to create the success they’re dreaming of. To help our Last Third Best Thirders learn how to start a business after retirement, we interviewed Gary Furr, of Gary Furr LLC, who specializes in organizational development consulting.
Gary launched his private consulting business after a successful career in the corporate world as a CEO, COO, and international business consultant. He recently published a helpful guide—It’s Not Hard, It’s Business—that outlines the fundamental steps to help business owners create success. Below is our interview with Gary about his new book.
Why did you write your book, It’s Not Hard, It’s Business?
I run into a lot of business owners who have had successful careers, and then retire from those careers or want to make a change and start a business. They typically start a business in something that they’re really good at. But once they get into the business, they find that it’s much harder than they thought it would be, because the skill set of knowing your product or service isn’t enough to create success in the business world. You need other skills in order to be successful in business.
As a result of my experiences with these business owners, I decided to write a book about some of the essential skills required to lay the foundation for success in business. It’s like building a house or a building. You have to lay a good foundation first, and that’s what I want to help business owner do.
How do your chapters – Strategy, Choose Your Direction, and Map Your Course – connect with each other?
Strategy is critically important to your business success, and I’m probably different than many consultants in that I define strategy as finding the need, filling the need, and collecting a check. In other words, what does your customer or client need? What are they struggling with? What are their pain points? What are their problems? What are the goals they want to achieve? That’s where the need is.
Once you’ve found the need, you need to Choose Your Direction: organize your business in such a way to fulfill that need, and that can be the tough part. When I was in grad school, a thought leader made a statement that stuck with me my entire career: “Business is rather simple. Find a need, fill the need and collect a check. Don’t screw it up in the middle.” He said most business owners screw it up in the middle.
One key to not screwing it up in the middle is to ask yourself some important questions: Where do you want your business to be a year from now? Two years from now? Three years from now? That’s called choosing your direction.
You need to have a direction, because without it, you’ll probably just meander, and you won’t get where you want to go. To get where you want to go, you need to Map Your Course. How do you bridge the gap between your current state and your desired future? You have to create a map to get your business from one place to the other. Otherwise you probably won’t end up where you want to be.
Choose Your Direction and Map Your Course
Learning how to start a business after retirement includes these vital chapters: Manage the Numbers, Know Your Cash Flow, Make Friends with Your Banker, and Pay the Tax Man. Can you summarize for us?
- Manage the Numbers. The numbers drive everything in your business, and I’ve run into too many business owners who aren’t paying enough attention to their numbers. They tend to be running their business from their checkbook. That’s like going to a sporting event and not looking at the scoreboard. The scoreboards in your business are the P&L (the profit and loss or income statement), the balance sheet, and the cash flow projection.
- Know Your Cash Flow. To make good decisions as a business owner, you have to know the numbers because those numbers drive everything in your business. Now the unfortunate thing about the P&L and balance sheet is they’re lagging indicators. They tell you what has already happened. You can’t change those numbers. There’s a third scoreboard that you need in your business and that’s the cash flow projection, because cash flow projection is how cash moves in and out of your business. Many business owners look at the net income at the bottom of their P&L and they think that’s cash, but it isn’t, for reasons I explain in the book. I tell owners they have to pay attention to the numbers on no less than a monthly basis. But weekly or even daily is better.
- Make Friends with Your Banker. And then I always ask my clients, “Do you know who your banker is?” And they often admit they either don’t know their banker at all or rarely see them. This is a huge mistake. In fact, I just recently wrote a book on making your banker happy, in which I explain all the benefits of knowing your banker. Most people fail to realize how having a relationship with your banker is critical to success.
- Pay the Taxman. The last piece of the finance part is to pay the tax man. Obviously, nobody likes to pay taxes, but what I find is that there are too many small to mid-market businesses focus on avoiding tax rather than building wealth in their business. To avoid paying tax, they try to spend all their money or their profit at the end of the year so they don’t have to pay the tax man. That’s a short-term strategy with a long-term negative effect, because it prevents you from building wealth in the business. That means your business will struggle to get a loan if you ever need one.
The second way this comes back to bite you is when you want to sell your business, because businesses are sold based on earnings before interest, taxes, and deprecation amortization (EBITDA). If you’ve been avoiding tax and paying out all your profit, you haven’t built any wealth in your business and your business won’t be worth as much when you go to sell it.
Do you any other books in the works?
I just published my second book, Make Your Banker Happy. To write the book, I interviewed ten bankers from small to mid-market banks in the local Portland metropolitan area. I asked what their best customers do well, and what their poor-performing customers don’t do well, in order to provide information to my clients on what they need to do to manage that relationship with their banker. Of course, I learned that the number-one thing that bankers are looking for is a well-run company that’s paying attention to their financials.
Are you taking new clients?
I am, but I’ve become more selective about the clients I take because I can’t help someone if they don’t want to be helped. You can’t think outside the box when you’re in the box, so you often need someone from the outside looking in—someone who is not emotionally involved in your business—to give you guidance and direction on how your business can be more successful and improve bottom-line revenue. Because everyone who is in business is in it to make money, and sometimes people need outside help to do that.
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