How to Go From Product Peddler to Professional As a Financial Advisor

According to Neil Rackham, author of SPIN Selling, one of the hardest things for many traditional salespeople to do is stop acting like a seller and instead sees the world from the buyer’s perspective. Now, this doesn’t mean trying to manipulate the buyer by seeing things from their point of view. What it means is a shift in perspective. It means abandoning the old views of buyer vs. seller and in its place; you must share the buyer’s concerns. It means shifting your thinking in two respects.

* Shift from persuading to understanding

* Shift from a product focus to a buyer focus

Top salespeople see the world from the buyer’s point of view. This helps them understand the needs of the buyer. So instead of worrying about persuading, they seek to understand. This leads to a natural tendency to ask more questions thereby uncovering more needs. As a result, the top salespeople don’t talk prematurely about product. Their clients see them as sincere which breaks down many of the walls we face when trying to persuade clients before understanding their situation.

Think of a bridge that connects products to consumers. You are that bridge. As a result, you have to understand both — product and customer. Which end is the most important?

* Most salespeople are more comfortable and proficient at understanding their products than at understanding buyers.

* Very successful salespeople have adequate product knowledge, but superior knowledge of customers.

* Salespeople with the highest product knowledge don’t make the most sales.

* If forced to make a choice, buyers are more likely to deal with those who best understand their needs than with those who best understand products or services.

How do you achieve a better understanding of your clients?

* Keep up with business and industry trends that affect your clients.

* Read current business journals as well as product manuals.

* Have a real curiosity about what’s going on inside the buyer’s world and ask a lot of questions about changes in their lives as well as their hopes and dreams.

From Chapter 12 of SPIN Selling, “Sharpening Your Skills”

“Why do we never get an answer when we’re knocking at the door? – The Moody Blues

It could be because we are knocking on the wrong door. Or are we knocking too loudly? SPIN is an acronym for a type of questioning/profiling used by top salespeople. S stands for “Situation”; P for “Problem”; I for “Implication” and N for “Need-payoff.

First let’s take a look at “Situation” questions. These are the type of questions that are essential early in the sales process. If you are meeting the prospect for the first time, you obviously need together data. These are also the type of questions that most new salespeople feel comfortable using. They are typically non-threatening to the client, but there are some risks associated with a “laundry list” approach to profiling with such questions as, where do you work? Do you own a home? Do you have a checking account? The problem with this “checklist” style of questioning is that the prospect will become bored if you ask too many. The thing that separates the successful salesperson from the rest of the pack is how they listen to the answers to these questions and the way they limit the number of questions at a given time. As they gather information they move in the direction of a perceived problem.

If your client or prospect can’t understand the reasons behind the questions you are asking they will quickly grow bored and the likelihood of a sale or cross-sell opportunity quickly dies. Let’s look at the difference between Situation questions and Problem questions.

Situation Questions

Problem Questions

Do you have an investment account?

Have you been satisfied with the performance of your investments?

Do you have a checking account at another bank?

What checking account features does your other bank offer that keeps your business?

Do you own a home?

Are you satisfied with the rate on your home loan?

Are you interested in looking at alternatives to your CD?

What is the purpose of the funds in your CD account? Is it long-term or short-term?

Where are you employed? How long have you been there?

Does your employer offer a 401(k) or other retirement plan?

As you can see, the Situation questions will gather the facts. The Problem questions can gather the same type of information but move you into a relationship mode where the prospect sees you as a problem solver.

“One of the greatest pieces of economic wisdom is to know what you do not know.” – John Kenneth Galbraith

By now we should have a clear picture of how to uncover our clients’ problems by asking questions in a manner that will reveal them. As difficult as it may be at times, we also discovered that we shouldn’t offer solutions until we know what the problem is. This is accomplished through a combination of Situation questions and Problem questions. We can then develop the client’s need with Implication and Need-Payoff questions. If we employ this strategy with all of our clients then we should hear significantly fewer objections and close more sales.

If you find that you are hearing more objections than you like, there’s a good chance that you are offering solutions before you uncover the problem. Many times we are the ones causing all of the objections. A recent television commercial for a health care provider discussed the phenomena referred to as “the real purpose of the visit” or RPV. Doctors have to ask a lot of questions to uncover the RPV because patients just like clients and prospects will reluctantly give up the real problem they need help with. Just as a doctor could be liable for malpractice if he/she prescribes a medication without understanding the problem so can a financial advisor for offering a solution before understanding the need.

Think about the typical CD customer. Given the low interest rate environment we are experiencing it may seem surprising that more of our members with CDs are not flocking into the branches to meet with our Financial Consultants to take advantage of better investment alternatives. So when you call them in the course of your Block Time during the day you probably come away frustrated at their resistance to your great ideas.

Keep in mind; you are not going to sell anything over the phone. Your goal is to get an appointment. When it comes to people and their money they want to have a trusting relationship with the person giving them financial advice. So if you have not uncovered a need, you are not going to get an appointment. And let’s be realistic, there are some CD customers who just won’t budge in spite of the great job that you do. Let’s look at two ways to avoid unnecessary objections.

1. Objections early in the call. The research done by Neil Rackham, author of SPIN Selling, shows that customers usually do not object to questions unless you become rude or otherwise offensive. Most of the time objections arise from solutions that don’t fit the member’s needs. If you find that you are getting a lot of objections early in the call it means that instead of asking questions you have been offering solutions and features. Try to keep from offering solutions until you uncover the real need.

2. Objections about value. If your members don’t perceive the value of what you are suggesting then you will get objections. It’s a sign that you are not developing the need strongly enough. For example, the CD customer raises the concern about NCUA insurance. You immediately launch into a discussion about how their $300,000 won’t be 100% insured anyway and the NCUA could go out of business just like any insurance company. You tell them the fixed annuity is safe and pays more interest than their CD, blah, blah, blah. You notice that your prospect is even more determined and throws out a number of objections and you find your sale slipping away. What the member is really telling you is that you have not demonstrated value with your proposed solution. Their concern is safety because they need that money for long-term care.

A better approach would be to confirm their concern about safety. Then proceed to uncover the need for that CD money (long-term care) and discuss how your solution addresses both needs by demonstrating how your proposed solution addresses both needs. Cut down on the use of features and concentrate on the use of Problem, Implication, and Need-Payoff questions.

Four Stages of a Sales Call

1. Obtaining Commitment starts before the discussion, by setting objectives that will lead to a realistic commitment.

2. Obtaining Commitment is easiest if you’ve developed strong needs in the Investigating stage and have demonstrated the capability to meet them

3. Obtaining Commitment has three steps:

* Check that you’ve addressed key concerns

* Summarize the benefits

* Propose a realistic commitment

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Crummey Trusts

Everybody knows we should do this, but nobody does it. In order for an insurance policy to be estate and income tax-free it must be placed inside an irrevocable life insurance trust, know as an ILIT. If the IRS does an audit, and no crummey letters have been sent and signed and returned by the named beneficiaries (every year), they could undo the trust and bring it back to the estate for estate tax purposes. The policy would still be income tax-free-but the face value of the policy is now included in the estate.

Crummey trust is the power of appointment given to the trust. A separate account is established for the trust. Each person writes a check from this trust for the other’s insurance premium, or if they utilize an outside trust service to provide the premium and crummey letters on their behalf. You cannot have any incidence of ownership (you or your spouse) on the insurance policy; the trust is named the beneficiary (not the estate). The Crummey trust allows additions to the trust, under the gift tax exclusion, up to the number of named beneficiaries. Every year, a letter must be sent to each beneficiary giving him or her the right to withdraw cash from the trust. If a person withdraws the cash, the withdrawal may undo the trust.

Sample crummey letter: (to each beneficiary)



Dear Trust Beneficiary:

Please be advised that a gift has been made to the ____________________ Irrevocable Trust on ___________ day of _____________, 19_____. As a beneficiary of the trust, pursuant to the provisions of Article III, you have the present right to demand from the trust your pro-rata portion of the gift, in the amount of $_________. If you wish to exercise your right of withdrawal, please do so in writing, addressed to the undersigned, within 30 days of receipt of this letter. If you do not wish to exercise your right of withdrawal within this time period, your right to withdraw will expire.

If you do not wish to withdraw from this trust, please sign and date the waiver below and return it to me.

Beneficiary Waiver of Withdrawal I acknowledge receipt of the notice of withdrawal for the ________________ Irrevocable Trust and hereby relinquish irrevocably such withdrawal right as of the date indicated below.

_____________ __________________________

Date Trust Beneficiary

*This sample document is prepared for purposes of illustration and is not intended as legal advice. The actual document which is to be executed by the recipient must be drawn by the recipient’s own attorney.

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Guide to Small Business Loan Interest Rates

If you are starting your own business and do not have enough start up cash to do so, a small business loan can be very useful. However, whenever we think of applying for loans we think of banks and financial institutions. It is true that loans taken from these banks have sound legal formalities. But sometimes these small business loan interest rates can be difficult to repay. Most of the time the novice entrepreneur fails to pay the regular monthly installments. This mainly happens because a business that has just started is less likely to be able to generate adequate revenue to be able to afford such high payment rates for these small business loan interest rates. When a business is unable to pay the installments due on these loans, it will results in negative publicity of the company in the market and even bankruptcy in extreme cases. Also, borrowers end up taking more loans in order to pay off these unpaid ones. This gives rise to a vicious cycle of bad debts.

Other than the high interest rates, the security that is sometimes demanded by regular banking companies is hard to meet. Unless you already have immense personal wealth it is possible to provide for collateral that is worthy of securing the business loan. In that case applying for the loan would not have been essential.

Small business loans are useful for initial capital formation of the company. Investments in physical space, infrastructure, stationery, wage payments, and other rents are also taken care of by these loans. Most of the time a new business does not have enough market experience to be able to boast off sufficient success under its name. Therefore, when banks and other financial institutions ask for profit returns and revenue details there is not much that these companies can come up with. However, these lending institutions do base their choice of borrowers based on business history. But for small businesses, this history is mostly very brief and devoid of much glory.

In such cases, you have the option of approaching the unofficial lenders in the market. They are no different from Shakespeare’s Shylock, except maybe the pound of flesh repayment medium! But seriously, these moneylenders usually have reasonable rates of interest and adjustable repayment plans. These loans also most often don’t require any collateral deposit or proof of credit history. You do not have to prove your worth by submitting your tax returns and business plans. Other than a few simple documentation procedures, these loans are much more borrower-friendly.

If you are looking for small business loan interest rates that are the lowest, beware of the terms and conditions that come with them at the same time. Banks do offer easy loans to small businesses, but most of the time they have unreasonable “conditions apply”. These short-term business loans may boast of the lowest interest rates on these loans, but the terms attached to them prove more of a liability to the borrower, which most often tends to overshadow the benefits of the loan itself.

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Advantages Of Owning A Recreational Vehicle

Bonding with family and friends would mean having fun and these days having fun would normally mean being outside the comfort zone or going to a place that is cool and riding in a recreational vehicle. Years ago when our folks would say "let's go camping" we would rush into our closet and grab a tent but nowadays going on a camp would mean riding in a recreational vehicle and heading somewhere. Thank goodness for the creation of RVs and camping would not mean staying in a tent that is so small and unsafe.

The stressful lifestyle that we have and the polluted environment that we are living, all of these makes us crave to go out on a trip to a place away from the stressful city and polluted community. This is one of the reasons why RVs are becoming so popular to many countries. RVs are also known as motorhomes and travel trailers by most folks. People like to travel in a recreational vehicle rather than taking the car, bus or train because it offers comfort and security just like a home does. Depending on the style and the owner's decision, a motorhome can have amenities just like a home. It can have a cooking stove, oven, generator, refrigerator, bed, comfort room, furniture, cabinets, shower, television, computer, and yes even bath tub. This is also the big difference if you have an RV; you can cook your own meal, sleep in a comfortable bed, can take a bath anytime that you want and go anywhere that you want.

Another advantage of having an RV is that it can save you money. Believe it or not but yes RVs can actually help you save money. If you are the type of person who is constantly on the road or someone who loves the outdoors then you should get an RV. Not only will you be able to save hundreds of dollars annually from hotel bills and from dining out in a fancy restaurant but with RVs you do not have to worry where to spend the night if you are in an unfamiliar place.

If you do not have the money to buy a brand new recreational vehicle then buy a second-hand travel trailers. There are actually many used travel trailers that are in good running condition. Be diligent in choosing the best RVs and in the end you will get the best one. When shopping for used travel trailers it is best if you do a little research online about the company where you intend to buy. Know its reputation by joining forums and online discussion. Through here you will know if their vehicles are in top shape and if their price is reasonable.

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Smart Cooking With Cookery Advice For A Healthy You

Cooking has different meanings for different people. Its meaning varies from person to person. For some it is a part of everyday life, for some a hobby and for some it is therapeutic. A mother cooks for her children and in return gets the most precious gift, a smile on her family's face. It also can be a hobby where all the creativity is channelized into creating new and innovative dishes and of course a stress buster. Cooking offers a kick start to a new you after a long and a stressful day. Everyone who cooks needs to be given some cookery advise at some point and finding the right source can be tricky.

Cooking and eating is fun and fulfilling but what is more important is to follow the right ways and techniques while cooking and consuming you favorite foods. All of us have at some point during our childhood learnt about the food pyramid which shows us the right amount of servings of certain foods one should have. But do we even remember what the proportions of those foods should be? Thus the USDA in the year 2004 has set new guidelines for the Food Pyramid Recommendations. USDA has also found that almost 90 percent of Americans do not follow these recommendations.

Cookery advise can range from the ideal food servings to cooking tips to serving tips. But the most common and widely suggested cookery advise given is to have four to five servings of fresh fruits and vegetable every day.

Other cookery advise includes:

Add color to your plate and have good servings of red, yellow and green fruits and veggies every day. They are high is essential victims, minerals and antioxidants.

Incorporate whole grains and milk products in your daily diet.

Balance your diet with right amounts of meats and veggies.

Limiting the use of sugar, oil and fatty foods is important.

Opt for white meats like poultry, and sea food instead of red meat.

Switching over to olive oil in place of vegetable oil or butter for everyday cooking will prove to offer great health benefits.

Add a variety of cheeses in your diet.

Use whole wheat breads and buns.

Go organic

Opt for backing in place of frying

Shallow frying absorbs more oil that deep frying so avoid it as much as possible.

This is an extremely healthy and refreshing veggie and sprouts salad that both kids and elders will definitely enjoy. You will need dices vegetables like cucumber, green, red and yellow bell peppers, tomatoes, blanches corn kennels, bean sprouts, chopped parsley, lime juice, olive oil and seasoning. In a bowl mix all the ingredients and season with salt and crushed white pepper. You can also add in cheese bits and vegetables of your choice. Serve chilled. This can be served before or after meals and is also great refresher after a long and stressful day.

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Design And Architecture – The Benefits Of Hiring Professional Architect To Realizing Your Design

If you are planning to design or renovate your own home, then you really need to consider hiring a professional architect to do all those tedious jobs for you. Why? Well, there’s a good chunk of benefits when you do this. First of all, you are inexperienced and unless you have a graduate degree on architecture your first design could be flawed. Also with the help of a professional architect you can solve all design problems and find the correct solutions. Especially if you are planning to build your very first home on which you are going to live in for years to come. Once you learn the information presented in this article, you will know whether getting an architect to solve your design problems is something that you should look into.

First, before we discuss some of the specific benefits of hiring a professional architect, let’s talk about why many people are reluctant to hire them. Usually lots of people prefer to defend their ego and pride rather than to accept incapability. They think they can do better themselves just by reading one or two short articles about building a house when in fact they’re not.

Those professional architects are people who had legitimately spent for at least 4 years in the university to be qualified as one. It’s incomparable if we are trying to achieve the same results as they had done by just following a pre-planned design that we can buy in a general store. Although their services do not come cheap, it will probably save you a lot of money in the long run.

Now let’s discuss some specific benefits that you can get by hiring professional architects. One, they have an ability to solve most complex design problems and they can find the best solutions to fit your needs. Two, they are quite reliable for managing the whole design project from start to finish. And three, they can also act as a supervisor for the current design project and will have no problem coordinating a team of workers to handle the job according to the plan. Once you know the specific benefits of hiring a professional architect, you will want to get them to help you with your home design plans.

Sometimes you can also hire them to just give you their expert opinions about your own home plans so you won’t make any obvious mistakes that could jeopardize the entire design. Usually, most of the pre-drawn plans that you can get in a local store are easy to follow if you understand all of the instructions. However, since many of us had hardly any experience on building a design plan from scratch, this could be a problem. It’s true that interior change on any given plan is a very simple adjustment and won’t affect much to the rest of the design plan. But, when you are planning to do a structural change you’d probably need a professional advice before doing so. Basically, having a professional architect to supervise you realizing your own plan is better rather than risking yourself to go with trial and error which eventually cost you more money.

So in conclusion, people aren’t used to ask for help to build their homes and most of them are likely to try to do it themselves despite all the benefits they can get by hiring someone professional. If you are one of these people, I want you to keep all the information above in mind when you are planning to build a new home from scratch and to decide whether hiring a professional architect is a right decision or not – specifically, evaluate all the benefits given above without allowing your ego and pride get the best out of yourself.

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Seven New Ways to Be Smart

Imagine for a moment that you lived in a world where only people who were very skilled at musical ability were considered to be valuable. And in this world, only those people who were musically talented were considered to be intelligent. Everyone who didn’t have musical ability was considered to be slow-witted and intellectually inferior.

In this imaginary world, only those people who were the greatest singers, composers, and instrumentalists could run for the office of president, or enter the upper levels of any corporation.

In a world like that, would you be one of the people who would easily succeed? Or would you be shut out of all the best opportunities?

If you had grown up in such a world, would you consider yourself to be intelligent? Would other people think you weren’t very bright because you couldn’t carry a tune?

If you happened to be very good at reading and mathematics in a world where only musical ability was regarded as valuable, would you decide that these other abilities you possess weren’t important?

Do you think it would be fair that other people decided whether or not you were smart based only on this very narrow definition of intelligence?

What if you lived in a world where only athletic ability counted? Or a world where only artistic ability was respected?

You can easily see by these examples that deciding to value musical ability only, while disregarding other forms of intelligence, would be very unfair and quite unrealistic. And the same would be true if we decided that only artistic ability, or only athletic ability mattered.

Yet in a way, something similar does happen in the world we live in. In our world, and particularly in our schools, people tend to value one particular type of intelligence very highly, and they often regard other forms of intelligence as less valuable.

If you happen to be talented at reading, logic and mathematics, you likely did very well in school. You were probably be regarded as very intelligent by your teachers and your peers, and you grew up confident about your intelligence and your ability to succeed.

That is because in our current world, an aptitude for reading, logic and mathematics has been defined as synonymous with intelligence. When you take an IQ (intelligence quotient) test, this narrow range of abilities is what is measured, and then the score is said to be a measure of your intelligence.

So if you happen to do poorly at logic and language because your skills are elsewhere, these tests and our school systems may label you as someone who is not very intelligent.

Standard intelligence tests focus a lot on exploring and measuring a person’s ability to understand logic, language and mathematics. But is that really the same as intelligence? Or is intelligence something broader than that?

Is there more than one kind of intelligence? How should we define intelligence? Can we really measure it? What is intelligence, really?

Several experts in the field of intelligence have proposed that we need to broaden our understanding of what intelligence really is, and the role it plays in successful living. If we define intelligence primarily as an aptitude for mathematical and linguistic/logical thinking, we may be missing other forms of intelligence that are also important.

A Harvard professor named Dr. Howard Gardner has spent many years studying the topic of intelligence in human beings. As a result of his studies, Dr. Gardner has proposed that our current beliefs about intelligence should be revised and expanded.

Dr. Gardner has suggested we consider at least seven different forms of intelligence.

These are:

· verbal-linguistic

· logical-mathematical

· visual-spatial

· musical

· bodily-kinesthetic

· social-interpersonal

· intra-personal.

See if you can discover which of these forms of intelligence is strongest in you.

People who have a strong linguistic-verbal intelligence will respond in a deep way to language and words. They love the way that language sounds and the way that words can be put together to create moods and special effects. A person who is high in linguistic intelligence will get a deep sense of meaning and pleasure from the way that language is used.

Writers, poets, and editors have a very high degree of linguistic or verbal intelligence. People who exhibit a strong need to correct errors in grammar are also very strong in this trait.

People with logical-mathematical intelligence are logical and systematic. They are are very good at analyzing data and they can follow complex chains of ideas to reach a logical conclusion. These people favor reason over passion. People with logical-mathematical intelligence can become successful lawyers, mathematicians, computer programmers, and scientists.

Artists, decorators, fashion designers, sculptors, photographers and architects must possess strong visual-spatial intelligence to succeed in their fields. Among people who have this trait, some will have a glorious, passionate understanding of color. Others will very strongly respond to visual line, texture, or three-dimensional space.

A person with musical intelligence may not necessarily play or compose music, but he will be always be a passionate lover of music, getting far more out of the experience than an average person. Musical intelligence is an ability to understand and respond to music, not just as background noise, but with a capacity to get deep meaning from the interaction of melodies, textures and rhythms.

Bodily-kinesthetic intelligence is very high in those people who are athletes and dancers. It is also a great asset in actors. These people are extremely attuned to where all parts of their body are located in space and are able to exert very subtle yet powerful control over all their muscles.

People with a high degree of interpersonal intelligence are good at picking up cues to the emotions of others and understanding the emotional states of those around them. They are particularly good at empathizing with others, and they know how to comfort, inspire and lead people. This is a good trait to have in a political leader. It is also a desirable quality in teachers, therapists and salespeople.

Intra-personal intelligence is the ability to deeply know and understand oneself. It is the ability to analyze and assess one’s innermost qualities and behaviors. This is a form of intelligence that may be found in philosophers and spiritual leaders.

These are seven basic qualities or abilities that may be considered as special forms of intelligence. Each of these can be highly developed in certain individuals and can be an important component of a person’s success in life and career.

When you consider Dr. Gardner’s expanded definition of intelligence, which forms do you think are especially strong in you? Which do you think are particularly weak?

When you went to school, did your educational experience address your intelligence strengths? Or did it target the areas in which you were weakest?

If you want to be successful in your schooling and your career, you will have the best chance to be successful if you choose a career that uses your strongest form of intelligence.

Does your present career make good use of your strongest form of intelligence?

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Financial Advisors – An Affirmation to Increase Income

If you’re in the beginning years of a financial advisor career, I’m guessing that you may want to add more revenues to your financial planning practice, which equates to more money in your bank account.

Here I’m offering an affirmation I created many years ago, when I was a financial advisor with American Express. It goes like this:

“I am now making more money than I could possibly desire through my skill and expertise as a financial advisor.”

Doesn’t sound very earth-shaking, but the results were quite impressive.

Here’s why the affirmation resulted in almost doubled financial planning fees in one year: because I repeated it hundreds of times daily, and I wrote it down at least 25 times each day.

I know that sounds like a lot, but it really isn’t. After a while I got used to it. It became second nature. It was emblazoned upon my mind and is still embedded there to this day, years after I created it.

One of the effects was that I emitted a different kind of energy, an energy that was picked up on by clients and potential clients. It was an air of making more money. And I emitted it more and more the more I repeated the affirmation to myself.

And it became locked into my mind more deeply each time I wrote it, which is why I wrote it at least 25 times each day.

Try it yourself. You can feel free to use this affirmation, or another of your own design and creation.

What matters is that it is powerful for you, and that you repeat it to yourself hundreds of times each day and that you write it at a minimum of 25 times per day. After about 2-3 weeks of focused attention and intention on your affirmation, you’ll experience a shift.

Have fun with it and much success to you!

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Last Will and Testimony As Opposed to a Life Insurance Policy

You may know it as a ‘will’, in legal terms though, the paper you arrange before passing on that assigns ownership of your money, property and other types of assets to family members or others is referred to as your ‘last will and testament”.

A will may have a number of important functions, including laying down your final wishes about:

• Who the executor of the terms of your will is

• Who you choose as the guardians of your minor children

• How to disburse payment for owed bills and taxes

On the other hand, life insurance is compared to a lawfully binding contract between the company issuing the policy and yourself. Unlike the will, it can shield as well as advance your current finances. Furthermore, it can take care of the monetary needs of those you love following your death – all without tax requirements. It can also pay for any tuition owed, estate taxes among other debts you leave behind. Moreover, a if included with a death or burial benefit can provide the finances to pay for your funeral, plot, headstone and related costs.

Life insurance can be divided into three different categories.

1. Term

This form offers protection during the duration of a specified time span and for the most part can be converted to whole life insurance, should you decide to do so.

2. Whole

This form involves permanent coverage that stays with you throughout your life span. It can also be used as an investment if it builds cash value over time.

3. Universal

This policy is a type of whole life insurance that comes with more flexible premium payment, face amounts and non-bundled pricing structure. It can build cash value at an adjusting interest rate that will generally never go below a specific percentile.

When it comes to the big way life insurance overrides the terms of a last will and testament, pay attention: If a person leaves behind both a will and a life policy, there may be a conflict of interest when two beneficiaries are named – one as the beneficiary of the majority of the assets named on the will and the other as the beneficiary of a large insurance policy that infringes on the what the will seemingly dictates. In such a case, it is the life insurance policy that overrides the will – with monies placed into the policy given to the policy’s beneficiary.

For more on life insurance and its benefits versus that of a will, speak to the professionals at an experienced independent insurance agency.

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Fatal Flaws in Your Business Plan

A business plan is the blueprint that guides aspiring entrepreneurs as they build their new business ventures. From 2008 – 2010, I taught a 20-week business plan writing course at an SBA-affiliated women’s business development organization. We met for three hours each week and students wrote their plans week by week, guided by the lessons.

When evaluating a business concept, unrealistic expectations or flawed thinking could creep in and undermine the planning. Excitement about the idea might distort one’s ability to see potential obstacles. What follows are scenarios that entrepreneurs-in-the-making should beware.

Unrealistic expectations

While it is sometimes true that using yourself as the ideal customer is a smart idea, since you understand the value and availability of that product or service, you might misinterpret the size of the market and the traction that can be achieved beyond a select group of true believers.

Insufficient information

Confirm the need for your products or services when you research and verify the number of potential customers who have the money and motive to buy from you.

Furthermore, make sure that you understand the buying process. Who green-lights the sale? What is the sweet spot price range? Lastly, where do potential customers obtain these products or services now?

Access to customers

Access to customers is everything and some industries or target customers seem impenetrable. You may identify the right customers, understand how your products or services fit their needs and know how to price and deliver. But if potential customers do not have the confidence to work with you because you lack an endorsement from a trusted source, you’ll starve.

Overestimating cash-flow

Usually, businesses won’t achieve desirable gross sales and or show a net profit in the first year of operations. Businesses that require high start-up costs especially will require long ramping-up periods. The business plan must acknowledge the potential for negative cash-flow and demonstrate how fixed and variable expenses will be met during that time. One must know how inventory will be financed, payroll will be met and office rent will be paid.

When writing your business plan, conservative financial projections are strongly advised. Customer acquisition may take longer than expected and the size of their purchases may initially be small. Moreover, it’s possible for a venture to be profitable on paper and still suffer from cash-flow problems, if customers do not pay on time.

Underestimating start-up costs

Developing a reasonable estimate of how much it will cost to get the venture up and running is essential. You must be prepared to meet the cost of all permits, equipment, inventory and staffing necessary to conduct business. If you plan to hire employees, it’s important to have a good idea of your minimum staffing needs up front (you can hire more as revenues increase).

“Magical thinking” business model

The business model illustrates how your venture will become profitable. Well thought-out interactions between marketing, financial and operations processes will promote and sustain profitability and you must map out how these will occur. The business model describes the core functions of the venture.

Likewise, the value proposition of your products or services must be articulated. The overall marketing strategy and selected tactics and resources that will promote the value proposition—intellectual property, patent rights, key relationships, or capital—will be accounted for. Sales distribution channels will be detailed.

Getting to Plan B (2009), by Randy Komisar and John Mullins, details the key business model components and advises business plan writers to segment their models into sub-headings:

  • The Revenue Model, to describe what you’ll sell, your marketing plans and how you expect to generate revenue
  • The Operating Model, to detail where you’ll do business and how day-to-day operations will function
  • The Working Capital model, meaning the business cash-flow requirements. Understanding cash-flow helps you know when money will be available to meet expenses like rent and payroll (it is distinct from revenue). A business can generate adequate revenue (sales) and still suffer from cash-flow problems.

Your business model will keep you organized and your priorities realistic. Matters such as quality control, collecting accounts receivable, inventory management and identifying strategic partners will mean much more than your number of Facebook followers, for example. Best of luck to you and your new business!

Thanks for reading,


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