If the statement, “Financial freedom always feels like it’s five years away” resonates with you, then you should watch this 5 minutes short video and learn about four things you need to pay attention to if you want financial freedom through your business to become a reality.
Transcript
Are you sick of trying the new thing is supposed to make you financially free from your business only to find that what you tried didn’t work again? What if I could show you an easy way to make sure this never happens? In this video, I’m gonna show you four things you need to pay attention to if you want financial freedom through your business to become a reality.
Hi, I’m Josh Patrick, the founder here at the Sustainable Business and the Financial Freedom Project. You know, I’ve been a serial entrepreneur over 40 years. I’ve been a blogger for the New York Times on the author of “Sustainable” fable, and here’s what’s really true.
I’m obsessed about what it takes to make a financially free business, and I want to talk with you today about four mistakes that you might be making if you ask yourself the question or say to yourself: “Financial freedom always feels like it’s five years away.”
So here’s the first mistake, the way you value your business is all wrong. Now, most likely, if you’re like most business owners, you think your business is worth way more than it really is. And the second thing is the way you’re going to sell it is dangerous. Now I see too many small businesses being sold for 30, 40, 50 percent in cash, and the rest is an owner finance note. Now, the sad truth about this is often those owner finance notes never get paid off. And the other thing here about the value of your business is when you’re talking about financial freedom, you have to talk about what you’re left with after you pay taxes and fees, and in many cases this can be as high as 40 percent.
Now here’s the second mistake you’re probably making. If you have a financial plan, it’s probably wrong. And the reason it’s probably wrong is because the business value that you have is your pretax created expense value and it’s valued at three, four, five times more than what a buyer is actually going to pay. You also are going to find that, when your plan is put together, you have lots of pretax expenses in your business that you’re no longer to be able to deduct, so that they now have to be after tax expenses. Now, those two things alone can make a financial plan that you have just be a complete disaster and not even worth the paper it’s printed on. And by the way,
a financial plan is always not worth the print paper it’s printed on. What is valuable is the financial plan mean process.
Here’s mistake number three. You’re probably not saving enough money for retirement. Or what I call pre-funding your buyout. You don’t have to save more. But what you do have to do is you have to work on creating excess cash in your business. And creating excess cash in your business is really all about finding a way to make your business create more cash. Then that usually is looking at how you’re spending your time getting you the stop spending that 10, 15, $20 per hour activity and at least will be enough two or three or $400 per hour activity. And this is where business strategies need help.
And most likely if you fix your business strategies and you fix how you spend time, you’re going to have enough excess cash to pre-fund your retirement.
And here’s mistake four. When I first went into this wealth management business about 22 years ago, people kept saying, there’s a tsunami of businesses that are going to be sold. Well, that never happened and the reason it never happened is too many people like you just couldn’t afford to sell your business so they keep working till they can’t work anymore. Now you might find that you’re getting burned out doing that and that’s not what I want you to do. There are better strategies for you to pursue. The one of those strategies might be the Wind down strategy. Now you’ve probably heard about the 80/20 rule.
And what the 80/20 rule really is, is that 80 percent of your business activity or 80 percent of your business results comes from 20 percent of the people you work with.
Well what if you just fire the 80 percent that don’t create business, and just kept those 20 percent working with you. You’ll be working one day a week or a few days a month and you can probably do that well into your seventies. And the longer you delay from having to retire or stopped working and having active income, the less money that you need and the safer your plan becomes.
So here’s what I’ve done. I’ve put together a Financial Freedom 5 Step Cheat Sheet and all you need to do is click the button in the bottom of this video and get it. And here’s what I would like you to do. I’d like you to scroll down, leave a comment, tell me what you’re thinking about financial freedom and your business. And I hope to see you back here really soon. And by the way, this is Josh Patrick and again, I’m the founder here at the Sustainable Business. Thanks a lot for stopping by.
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