How to retire early on a decent income

Most people would like to retire early on a reasonable income that supports their desired lifestyle.

The reality is somewhat different for many, but if you’re running your own business, you are in control of your own destiny more so than most.

All it takes is some careful financial planning, to set out your personal financial goals and how you can run your business to achieve them.

Sounds interesting? Read on…

Not everyone is good at the numbers. But to run a successful business you simply can’t afford to ignore them. By all means leave it to an expert to do the number crunching for you, but do yourself a favour and pay attention to their edited highlights.

For example – do you know how many sales you need to make to break even? How many more sales do you need to increase profitability by 10%? And are your profits being eaten away by a poorly performing product or service?

It’s time to get smart, if you want to retire early!

So, here’s some of the detail…

You need a financial appraisal of your business model, either from your finance director if you have one, or from a reputable outsourced professional.

And this appraisal should include the following:

  • A thorough assessment of your business model – what does it do, how does it do it, does it make money, is there potential for it to make more money? Is it losing money unnecessarily?
  • An examination of your product or service mix – do they all contribute to profits? Are there other opportunities to increase sales and profits?
  • How is cash flow? What can you do to improve it?

At this stage, once you are informed about the financial health of your business, you’re also in a position to make astute business decisions and take action.

And you must set realistic financial targets that are achievable, based on the capabilities of a business model that is running at its optimum level. Then identify strategies needed to achieve those targets

And once this exercise has ironed out inefficiencies and created a profitable business model, you need a financial management system in place to track performance against your targets, so you can monitor progress.

Measuring and monitoring progress is key to identifying where corrective action is needed if you are to stay on course to meet your financial goals. A plan without a gauge is not worth the paper it’s written on. And it’s inevitable, in an ever-changing world, that you will need to adapt your plans to suit the market conditions.

It’s worth noting that this is an ongoing process, and should become part of your monthly, or weekly regime to check figures, sales, profits and how they fare against the realistic results that you’ve established your business is capable of achieving.

Remember – you want to retire early and have a great lifestyle – so the effort you put in to looking after the financial performance of your business now will repay you further down the line.

If you’re keen to take a greater control over the future of you and your business, we can help here at Blaze Ahead.

Julian Portch, an esteemed member of our team operates as a virtual finance director for a number of businesses, adding the financial rigour they need to stay focused on medium and long-term goals through making the right decisions today.

If you’d like to find out more details about this service, please do get in touch. The sooner you act, the better the prospects for you to live life more on your terms!

Alternatively, you could carry on as you are, and hope for the best…

 

 

 

Grab the opportunities of a New Year with both hands!

What are you doing to give your business the best chance it has of succeeding and thriving in 2013? Let’s start with making an honest assessment of the health of your company right now:

Are there warning signs that all is not well?

  • How is your cash flow?
  • How are sales?
  • How is your ability to pay debts as they fall due?
  • Are you up to date with Inland Revenue payments?

If you are struggling, take a good hard look at the plans you made 12 months ago. The position your business is in today is a direct result of the decisions you made back then. Were they poor decisions that missed the mark or were they the rights ones but you lacked the will to implement them?

And if your business is doing great, then congratulate yourself on a year well spent, but what about the next 12 months? Now is not the time for complacency. What will it take to improve results, profits and prospects in 2013?

Do you foresee additional threats and weaknesses that weren’t there before?

Ask yourself a direct question – how accountable are you? Do you have your own targets to meet or are you relying on everyone else to deliver? It’s a harsh question I know, but in my experience, those at the top don’t always set the standard for everyone else to follow – and that’s their downfall.

Plans are no good unless they are implemented, they are measurable, and the people responsible for delivering them are held accountable.

So it’s helpful to enlist the services of an independent business consultant; someone to hold a mirror up to the management and ask serious, searching questions.

Here are some ideas that will make a difference, to get you thinking:

What strategies can you implement now to get money into the business?

Look for some quick wins:

  • Can you cross sell or up sell to your existing customers?
  • Can you change your product offering, your pricing, your marketing message?
  • How about introducing a referral scheme to reward existing customers for passing you new business?
  • Who should be responsible for implementing these strategies?

Your staff need to understand what your expectations of them are – have you told them, set them targets and reviewed their progress? If you could improve their performance by 10%, what impact would this have on your bottom line?

Times are tough, so it’s time to get tough. Be clear about your objectives, stay focused, review regularly, and communicate with your teams – having them on board pays dividends that help increase profits.

Above all, everyone should be held accountable – from the top to the bottom – adopt this as your mantra, keep referring to it, and see what a difference it makes.

If you’d like an honest, no nonsense assessment of where you are now, and what you need to do to make a tangible difference to your future prospects, talk to us at Blaze Ahead – we’ll help you see it as it is and take the right action!