Plan B: The Real Deal Guide to Creating Your Business

Plan B: The Real Deal Guide to Creating Your Business

by Kathleen Rich-New

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Overview

Plan B should be MANDATORY reading before you ever consider creating a business. It was written to provide the “business readiness” needed for those who have no successful entrepreneurial experience. You will learn the good, bad, and ugly about each of the four ways to create a business (start a business, buy a business, buy a franchise, and network marketing.) You will learn what due diligence you must do before you start spending your time and your money.
 
Plan B answers the three IF questions: If you have what it takes to create a business. If you really want to start a business now that you know what it will take. If you want to create one  independently or with a team.
 
Then it answers the WHAT NEXT questions as you determine the best Plan B option for you and for your preferred work lifestyle.
 
It ensures you are ready for the journey.  You understand some of the rabbit holes that lie ahead, and the resources your will need so you won’t be in the 80% of new businesses that fail in the first three years. Instead you will be part of the 20% with long term success.
 
Through numerous examples, assessments, and stories of business successes and failures you will know if you are ready. You will be able to engage both your head and your heart for the thrilling adventure of creating your Plan B. Kathleen shows you how.

Product Details

ISBN-13: 9781614483786
Publisher: Morgan James Publishing
Publication date: 01/11/2013
Pages: 308
Product dimensions: 6.00(w) x 8.90(h) x 0.80(d)

About the Author

On her way to becoming the accidental Plan B expert, Kathleen Rich-New, spent over 25 years working for companies including Apple Computer, Nortel and Silicon Graphics (SGI). She earned three degrees in business and none of them taught her what you will learn by reading Plan B.
 
Kathleen’s path of entrepreneurship led her down many rabbit holes, as she founded Clarity Works Consulting and The Executive Woman’s Coach. The lessons learned on her journey, plus those of many other experts will show you how to find the right Plan B business for you…and you will be able to create it faster and easier, avoiding most of the rabbit holes.
 
Kathleen is a frequent speaker, trainer, and consults on leadership, how to get more from the employees you have, and entrepreneurism. Her mission is to help you create and grow a successful Plan B business.

Read an Excerpt

CHAPTER 1

I Worked Hard, I Played by the Rules, and This Is All I Get?

LET'S FACE IT, if you are reading this book, you are already in transition. You realize you aren't going to get what you want from what you are doing now. You need a Plan B because your Plan A job isn't working for you. You are starting to lean forward, interested to learn more about Plan B.

Let's define the terms Plan A and Plan B and the differences between them. Plan A is a job working for a company to earn a paycheck. It is the "working for the man" plan to make money. You pretty much know in advance how much you will earn based on your hourly rate or annual salary.

Plan B, as we use it, refers to the other ways you can make a living that do not involve working for someone else. For example, you may use your experience to start your own company, or you may decide to buy a business. Plan B puts you in charge of your time and the work you do. And you are writing your own paycheck.

During the past three decades the world has changed, and it's not going to change back any time soon. The rules most of us have grown up with have gone out the window. Jobs have been outsourced overseas and they are not coming back. You and many others have arrived at this new reality for any number of reasons. Some people planned all along to work for themselves, but for many others, there is no choice: a job was eliminated, a skill set was no longer needed, or declining health no longer made it possible to continue working at the same job.

Perhaps this all-too-true story will sound familiar because something similar has happened to you or someone you know. Let's use David's situation as an example.

David, a passionate sales engineer professional, was waiting his turn to find out if he was going to have a job after the latest round of layoffs. He had survived the last two rounds but was worried about this one. Sales were sliding, and management had announced they were going to reduce the number of employees to a fraction of the current staff.

David walked in the door on this particular morning and saw his manager, Jim, and the human resources manager, Stacy.

"This can't be good," he thought. Jim and Stacy stood up. He shook their hands and they all sat down.

Stacy looked straight at David and said gently, "This is going to be a difficult conversation, David. Your position has been eliminated."

David flinched as if he had just been punched in the gut.

"Do you need a minute or would you like us to continue?" asked Jim.

"No, go on," David said. It's not like he wasn't expecting it, but that didn't take away the shock.

Jim and Stacy explained the layoff package and talked about the severance pay, help with his job search, and on and on.

Suddenly, David's rage exploded. He stood, yanked up his right shirt sleeve, and pointed to the company's colorful logo tattooed on the inside of his forearm. "I bleed six colors for this company. I worked hard, I played by the rules, and this is all I get?"

As David learned, loyalty to one company no longer provides job security.

Why Is Plan A Not Working Anymore?

If you're living your Plan A, you may already feel vulnerable because you realize your job could end. That's good — at least you are paying attention. Those who feel safe are either oblivious to today's reality, or in denial. If you know people like that, please give them a copy of this book; they are the ones who need to sit up and take notice.

Plan B is about making plans before you need them. The captain of the Titanic probably thought his job was pretty secure ... that is, until he hit the iceberg and remembered there were not enough lifeboats for the number of passengers on board. If you don't want to go down with the ship, keep reading and get to work on your Plan B. You never know when your path may encounter icebergs.

With a job — your Plan A — you may be making a living but perhaps your lifestyle is not ideal. You are probably like most people — trading time for money, and perhaps both are running out. You may have come to realize that, although some of your bosses have been brilliant, caring, and competent, leaders in too many organizations are small-minded, self-centered individuals who may say the right things but don't really give a hoot about what happens to you. They are too busy with their own high-pressure, iceberg-filled reality.

All you've really wanted was to enjoy the company of smart, hard-working peers, be mentored by considerate and knowledgeable bosses, and ease into a comfortable retirement lifestyle at an early age. You did what they told you to do: get a good education, get a good job, and work hard. That was your Plan A.

How is that working out for you? I understand any anger. I have been there ...

But don't throw this book at the nearest wall! It can be your best friend from this point on. You are about to create your own economic stimulus package by learning how to create your Plan B.

But first, let's see exactly where Plan A went astray. Consider the wisdom of the Greek historian Plutarch:

"To make no mistakes is not in the power of man; but from their errors and mistakes the wise and good learn wisdom for the future."

The Mythical Promise of Plan A (Whatever happened to the gold watch?)

The traditional Plan A has been to work for a company for twenty, thirty, or forty years and get a lifelong pension and health care benefits. Traditionally, Plan A had a contingency for job loss; you simply go on a job search for a replacement job. Some of you may find a replacement job and be able to continue with your Plan A. Or you may find the replacement job's pay is a fraction of what you were making. And, for many, there simply are no replacement jobs. An associate's, bachelor's, or master's degree might get you a job, but there are no guarantees.

In fact, it is estimated the average person today will have changed jobs seven to ten times in their lifetime. An interesting statistic I heard recently is that the average twenty-two-year-old will change jobs twelve times by the time they are thirty-eight years old. The driving force behind this churn is the rapid advance of technology coupled with the culture shift involving the human dynamics of technology dependence.

Those in their twenties and thirties will likely never know job or career security. Even if there is a chance for job security, many younger workers simply aren't interested in staying with one company for the promise of an eventual pension decades in the future. Their future success will come from their ability to be entrepreneurial.

Whether we blame it on lack of job security or the demise of company loyalty, the fact remains ... it may be time to kiss Plan A goodbye.

Financial Security Is Still Possible

I attended a business presentation a few years ago with a US Census chart that illustrated in 1994 only five out of one hundred people in the United States achieved financial security, and only one of those enjoyed total financial freedom (defined as being able to do and have virtually anything you want, within reason.) That statistic seems to still be true today.

This book can guide you through considering — maybe for the first time — how to create your Plan B so you can become one of those enjoying total financial freedom. Take a minute to step back and think about what your environment has taught you so far. The education system has been designed to move students into jobs working for someone else. A typical high school education does not teach the basics of business, nor does a two- or four-year degree. Master's degree programs train you to be even more valuable inside an organization but do not teach you to run your own company. My undergraduate business degree and two master's degrees certainly did not prepare me for the Plan B that I had to create. Traditional influences such as schools and family may have originally led you away from creating a Plan B and urged you toward getting a job.

Now, however, a Plan B is within your reach and you have the power to create one. Like anything else you have started, it will be a journey, but this time you will have a road map of what lies ahead.

How Did We Get Here? (And where are we going?)

The details may be quite different, but the pattern is basically the same. We have made decisions that did not work out as we had planned. Additionally, local, national, and international economics have directly impacted each of us. How long it will take to recover from any losses will vary based on many things, such as the skills you have, your initiative, and the strength of the demand for what you can offer others.

The goal of this book is to help you make the best choices in these difficult times, and to give you a lot of insider information. You will learn the good, the bad, and the ugly about each of the Plan B options so you can choose yours wisely.

Clearly, I cannot know your specific goals for financial security and what you hope to be doing as you continue your work life. I can, however, show you useful, timely information so you can consider what might be possible.

Your grandparents could have lived quite well on $30,000 a year at retirement. Their mortgage was probably paid off and their lifestyle was simple. Vacations once a year were the norm. But today, the lifestyle expectations of those approaching retirement aren't about staying home and watching television. Instead, they are about traveling, volunteering, and remaining active. All of those activities cost money. And your grandparents didn't have cell phone, internet access, or cable bills to pay either.

Statistically speaking, above are the data of the average income of people in the United States from 1996.

Who Is Going to Pay the Bills When You Retire?

One of the early working titles of this book was, "What is your Plan B, or will you have to work until you die?" It was too long for a title, but it's still quite apt as a point to ponder.

Facing the facts, most of us are going to be on our own. Social Security is a mere pittance, if it even survives the next few decades. Pension plans are pretty much becoming a thing of the past. Research on the funding levels of some local and state retirement plans for government workers revealed many of them were well below the levels needed to deliver on the promises made. That means some retirement funds don't have enough money to pay for the employee pension and medical benefits costs that have been earned by workers, and those plans will eventually run out of money. For some people, the checks will simply stop coming.

One of the many reasons for the funding problems in both public and private sectors is that we are living longer. Life expectancy in 1950 was sixty-eight; in 2002 it jumped to seventy-seven. That means people are receiving pension payments, medical benefits, and social security checks almost a decade longer than our relatives did fifty years ago. Many more people are celebrating their one-hundredth birthday, and it takes a lot of money to live well for that long.

Companies, hit hard by the down economy, are scaling back. Of those that survive, many will no longer offer lifelong pensions or medical benefits. One Federal Bureau of Investigation (FBI) agent told me they have nicknamed their new pension plan "the work until you die plan." New hires at a variety of organizations are told they will not have medical benefits after they retire. Certainly AT&T, GM or Citibank aren't going to offer job security or guarantee a retirement plan. Even if they wanted to, they are not able to afford it.

We all want to hold on to the lifestyle that we've worked so hard to achieve. We don't want to shrink it, or live a narrower life. Yet, many people's dreams are melting down as the economic growth stalls. Investments have destroyed many retirements. Poof! It's gone. There may not be enough hours or days left to simply work longer and harder to replenish the retirement fund.

Financial advisors just a few years ago taught us the rule of thumb that we need 65% of our yearly income to keep our same lifestyle in retirement. Then the figure went to 80%. The percent that is the right number for you will, of course, depend on your expenses and lifestyle. Be sure to discuss this with your retirement experts to determine what your happily ever after number will be.

Social Security Benefits

When it was originally introduced, Social Security was designed to offer financial assistance to help the aging population survive. But that was back in 1935, when the average life expectancy was less than sixty-five years.

When Social Security payouts began, there were, on average, over forty workers paying into the fund and their monies supported one retiree — a ratio of more than 40 to 1. With the invention of the birth control pill and family planning tactics, our country's birth rate dropped. In 2000, for example, the ratio of workers to retirees was 3.4 to 1. By 2050, or when today's college students reach retirement age, the ratio will be 2 to 1. Many other developed nations face the same concern: not enough younger workers paying social security taxes to support the growing number of seniors.

For decades, we've heard warnings that the Social Security fund will run out of money. The most recent projection is it will be totally depleted by the year 2036.

Besides the increase in longevity and the decreased number of workers paying taxes per retiree, another contributing factor is the repeated withdrawals on Social Security funds to balance the federal budget or to pay for other government programs. Unfortunately, social security payments are the only income many retirees will receive, which will create extreme hardship when the fund dries up.

Retirement Plans Designed to Benefit ... Whom?

Traditional jobs have created pensions designed to provide lifelong retirement income, even for those employees with as few as twenty years of service, regardless of the employee's age.

One example of this is the military — certainly a dangerous and demanding career. A common career choice is to join for twenty years, then retire and begin receiving a 50% pension payout right away. This is a sweet deal: join the military at age twenty, work for twenty years, retire at age forty, live until age one hundred, and enjoy a sixty-year pension payout which is three times longer than the time served in the military.

For example, one forty-something retired soldier shared with me that he retired after twenty years of service and is now receiving $31, 000 annually for the rest of his life. It is not enough to fund a great lifestyle, true, but it is a steady check.

The problem is that no government or organization can sustain that kind of cash outlay for long.

Let's take a closer look at the types of pension plans that have been popular in recent decades, and why you can't count on them for retirement income. There are three primary types: defined benefits, defined contributions, and individual retirement accounts, or IRAs.

The traditional defined benefit pension plan guaranteed how much you would receive each month in retirement. The plan was designed to reward only those with lengthy employment for a predetermined number of years with one organization or government institution. Now, however, it has become too expensive and too difficult to fund this type of pension plan because people live longer and investments funds don't always grow fast enough. It is rare to find this kind of lucrative pension anymore; they typically are only offered by large, mature companies or by government organizations.

The next type of plan is the defined contribution pension plan, which is the direction many organizations have moved toward (and away from the defined benefits plans described above). In a defined contribution pension plan, the organization contributes a specific amount (the defined contribution) into a pension plan each month. An employee must stay with the company for a stated number of years in order to eventually receive the company's contribution. This is known as vesting.

(Continues…)


Excerpted from "Plan B"
by .
Copyright © 2013 Kathleen Rich-New.
Excerpted by permission of Morgan James Publishing.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Introduction
A Few Rabbit Holes Can Be A Good Thing
A World of Wisdom and Tips—All in One Place
NASA Space Shuttle Program’s End Was Actually a Great Beginning—Who Knew?
Make Fewer Mistakes and Enjoy More Successes
Who Will Benefit From a Plan B?
This Real Deal Guide Shares It All—the Good, the Bad, and the Ugly
Specific Benefits of the Real Deal Guide
You Now Have What It Takes

Chapter 1
I Worked Hard, I Played by the Rules, and This Is All I Get?
Why Is Plan A Not Working Anymore?
The Mythical Promise of Plan A
Financial Security Is Still Possible
How Did We Get Here?
Who Is Going to Pay the Bills When You Retire?
Social Security Benefits
Retirement Plans Designed to Benefit…Whom?
Wrap Up

Chapter 2
Is Your WHY Bigger than Your BUT?
Determine Where You Are
Determining What You Are Ready to Improve
Life Values Model
Identifying What You Don’t Want and Do Want
What You Have Created So Far
Wrap Up

Chapter 3
The Real Deal about You 
The Hero’s Journey
Departure
Initiation
Return
It Doesn’t Take a Rocket Scientist to Launch a Plan B
Five Requirements for Successful Change
Listening to the Right People
Wrap Up

Chapter 4
There Are Many Paths to a Plan B
Start Packing for Your Journey
Four Ways to Create Your Plan B
Overview of the Four Plan B Options
The Wealthy 1%
Starting Your Own Business
Buying an Existing Business
Buying a Franchise
Network Marketing
Wrap Up

Chapter 5
Thinking It Through: Avoiding the Pitfalls of Wrong (and Costly) Decisions
A Structure for Thinking Through Your Plan B
Critical Resources for All Businesses
Time
Money
Finding Your Work Lifestyle
Type of Work
Type of People
Location of Your Work
Energy Required, i.e., Your Physical and Mental Stamina
Emotional Toll
Exit Strategy
Wrap Up

Chapter 6
Six Key Ingredients of the Most Successful Businesses
Favorable Market Trends
Consumable Products or Ongoing Services
Perfect Timing
Strong Compensation or Attractive Margins
Powerful Partnerships
Unique Products or Exclusive Technology
Universal Truths for Business Success
Wrap Up

Chapter 7
The Real Deal about Starting Your Own Business
Starting a New Business
Two Types of Start-Up Businesses
Duplication
Innovation
The Real Deal Checklist
Wrap Up

Chapter 8
The Real Deal about Buying a Business
What Happens When You Ignore the Experts, the Resources, and the Information?
Buying a Business 101, and More
Advantages and Disadvantages of Buying a Business
Applying What You Have Learned
Beginning the Search
Protecting the Seller’s Information and Proving Your Financial Resources
Conducting Your Due Diligence
Meeting with the Seller
Making the Offer
Wrap Up

Chapter 9
The Real Deal about Buying a Franchise
Franchising 101
Franchises Have Many Advantages
Franchises Also Have Disadvantages
Franchise Controls and Restrictions
Four Franchise Models
Selecting a Franchise
Six Key Ingredients for Evaluating a Franchise
The Real Deal Checklist
Shopping for a Franchise
Internet Search
Shopping at a Franchise Exposition
Using a Franchise Broker
Advantages of Using a Franchise Broker
Disadvantages of Using a Franchise Broker
Finding a Franchise Broker
Interview Questions for Evaluating Brokers
Franchise Advisors Work for You
Finding a Franchise Advisor
Conduct Your Due Diligence
Should You Buy a New or an Existing Franchise?
Wrap Up

Chapter 10
The Real Deal about Network Marketing
Giving You the Real Deal Guide on Network Marketing
Network Marketing Advantages
Network Marketing Disadvantages
Network Marketing: Ponzi Scheme, Pyramid Scheme or Path to Profit?
Network marketing Controls and Restrictions
Network Marketing 101
Percent of Sales by Major Product Groups
Is Network Marketing the Best Plan B Option for Me?
Six Key Ingredients for Evaluating a Network Marketing Company
Use the Real Deal Checklist to Evaluate a Network Marketing Company
The Two Methods to Make Sales in a Network Marketing Company
How Network Marketing Sales are Typically Made
Typical Network Marketing Compensation Plans
Due Diligence for Selecting a Network Marketing Company
What to look for in a company
Selecting Your Up-Line
Up-Line Due Diligence Checklist
Wrap Up

Chapter 11
Putting Your Plan B into Action
Plan B Success Stories
Get Busy Narrowing Your Options
Plan B Option You Are Evaluating
Researching Your Chosen Plan B Option 
Starting a Business
Buying a Business
Buying a Franchise
Network Marketing 
Veterans, Active Military, and Trailing Spouses
Wrap Up
The Increasing Popularity of Plan B

Appreciation & Acknowledgements
Resources and Offers
About the Author
Index

What People are Saying About This

From the Publisher

"No hype or theory here. Plan B gives you the good, the bad, and the ugly about the four ways to create a business. Kathleen offers you the secrets most new business owners don't know until it's too late. You learn what lies ahead so you can start with your eyes wide-open."
-Joe Pici, Speaker, Trainer, Author Sell Naked on The Phone

"As a long-time promoter of strategic and tactical planning, I have always advocated the need for a "Plan B" (and, sometimes, a Plan C and a Plan D), I am delighted to recommend Kathleen's Plan B book. It is chock full of practical ideas for making your business dreams come true. Buy it; study it, and don't lend it out."
-George Morrisey, Author Creating Your Future: Personal Strategic Planning for Professionals and Morrisey on Planning.

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