Successful business build business plans and then most importantly, execute the business plan. The most successful companies are those with a business planning process that allows for adaptability to change as conditions change.. Need for budgets, goals, long and short range plans, capital requirements. Everyone sitting in this room has had a hand in setting budgets for businesses. Again, do you take that same disciplined approach to your life? Who has done a business plan for themselves? Study of Harvard graduates – people who had written personal life plans succeeded much more than those who didn’t Our premise is that the most successful people, just like the most successful businesses, consistently build and implement a comprehensive plan.
So think of yourself as a business. In my case, Joni Lindquist Enterprises. Your income vs small business income – many execs make close to $250k, which is just as much as many small businesses Small business owners have financial plan, do routine reviews – but do you? Many people spend more time implementing and reviewing their companies or division plans than they do their own life – whether you’re in a small business or large enterprise. Does this makes senses/
Our talk today is going to focus on these five steps in building your personal business plan. SHOW FLIPCHART Step 1: situation analysis – just like a business – assess where you are Step 2: What are your goals? And this is more than just retirement goals – what are your life’s goals. Step 3: Gap analysis – what is gap between where you are and where you want to be. Building the plan to close the gap Step 4: Implementation – getting it done Step 5: Monitoring and adjustments – just like businesses review results monthly, quarterly – shouldn’t you?
So let’s begin with Step 1: Where are you now? This step involves Compiling information and data about your current situation Wealth is more than monetary assets. A comprehensive personal plan includes the assets of human capital, financial and emotional capital. Each one of you has these assets
Let’s define each of these component of capital. The first is your human capital – its your education, experience ad skills. Remember, we're still in Step 1, the Situation Analysis. This is the time to take stock of your human capital. As a career and executive coach, one tool I use with clients at KHC is the Career Satisfaction Index --Now take a look at the Career Satisfaction Index Survey you completed as pre-work. This is just one tool to make you aware of your current career or human capital situation. Hopefully, it was thought provoking and maybe provided an “AHA” or two for you. When I work with clients as their career coach, I ask questions: * are you on the right ladder – we work with people who are successful but realize they don’t like what they’re doing. Anyone know anyone like that? * are you where you thought you’d be by now? Sometimes its good to remember what you thought you’d be as a kid -- you hear that nervous giggle – are you really tapping into your passions -- which leads to – do you love what you do There’s other questions to probe, but this gives you good idea
Now let’s look at your financial capital. We’re still assessing your personal situation. Which is a function of your age, net income & net worth. Again, a tool we use at KHC is this investable et worth. Take a look at your investable net worth test in your package. NO need to share, just take a look. How do you feel about this? Its important when assessing your financial situation that you go deeper than just the numbers - -what are the numbers telling you. As a wealth manager, I work with clients to dig more deeply into financial situation. Money typically isn't’ the end goal – financial capital is used to achieve life goals What do you earn vs what you keep – what is your savings rate. What are your liabilities vs your financial assets – what do you owe vs what you own. We’re a society holding significant debt – what is your situation? Why – why do you own what you own – is it tied to a broader plan Is there method to the madness?
We define emotional capital as your attitude, your support network and your willingness and ability to communicates your hopes, fears and dreams with others Two components of attitude are resiliency and optimism – can you bounce back, what outlook do you bring to your life. We all know people who we admire for their ability handle setbacks. Numerous studies have also shown that one’s outlook – how positive you are in general – help people be more successful Who supports you and how well do you communicate with them – this can be your spouse, family, colleagues and friends. Its whoever you trust in your network. It’s not quantity but quality of those support relationships This component of your assets, emotional capital is often overlooked but can be very powerful as people go through transitions and face challenges in their lives
To put this together, we use the SWOT analysis – just like businesses do in their planning processes – ask attendees: WHO CAN TELL ME WHAT SWOT STANDS FOR? As the model shows, you have Strengths, weaknesses, opportunities and threats for each asset. Too often people and businesses focus on just the financial element. ASK THE ATTENDEES for examples of strengths in human, weakness in emotional, threat in human and opportunity in human
Let’s make this a little bit more real. We’ll be talking about a case study , taking Bob & Sue, a fictional couple based loosely on real clients of ours, through the five planning phases. Bob & Sue are a couple in their 30s, with two young children, both have successful careers with high powered jobs So when Bob & Sue went through the situation analysis – the “Where are you now” step – this is a snapshot of their SWOT. Quickly go through the SWOT We’ll come bac k to Bob & Sue later to see how they move through the phases of their personal business plan
To finish STEP 1 : Where are you – If you were to do this analysis, -- Take a look at your Career Satisfaction Index, your inestable net worth, and your emotional capital and capture these and other data in a SWOT, what would it tell you? MOVE TO FLIP CHART TO PUT CHECK MARK BY STEP 1
Now the second phase is your goals – what is it you want to achieve? – POINT TO FLIP CHART Just as a business builds a long term vision, a mission and goals, you should too. Its important to step back at this point and spend some time reflecting and talking with your spouse/significant other about what your goals are. We all tend to get caught up in “keeping up with the Joneses” – but is that what you really want? What are your life goals and career goals? We often ask people questions like: 1. what regrets do you have? What do you need to do to ensure you don’t have any more regrets? What do you want your legacy to be? And its not enough to “raise healthy children”. What will your legacy be? If money were not an object, what career would you pursue? Visualize your life 5 years from now – what does it look like.
So lets go back to our favorite couple, Bob & Sue. When we poked and prodded them, a couple goals came forward: -- they both wanted a different lifestyle – tired of not having time handing kids off to each other and others, tired of the pace -- the wife came to realization that though she was quite successful, having risen to an executive level in a corporation, she wasn’t happy – this “accidental” career wasn’t fulfilling. What she really dreamed of being was a professor – leaving a legacy of teaching younger generations. When – going back to their SWOT< they were emotionally ready to make this transition and had the support of others – to begin pursuing these goals now
MOVE TO FLIP CHART TO PUT CHECK MARK BY STEP 2: SO now we move to Step 3 in our 5 Step planning process. Again, just like a business conducts a gap analysis and builds a plan to close the gap, individuals should do the same. Now that you know where you want to go and where you are, you need to understand the gaps and build the plan
A comprehensive wealth management plan contains the following assets, as we’ve talked about. In this phase, you need to build plans for your human, financial and emotional capital. Resources we provide for that include a Career Path Plan, a comprehensive financial plan outlining various scenarios and a life plan. This life planning component is about “Making Life Count”. We encourage our clients that your plan isn’t simply a retirement scenario. It is “Making Life Count” as you go through your lifetime, balancing doing the things you want to do, living like you want to while preparing for the future. Just like a company’s business plan, you should put targets, timelines, budgets together for your personal plan
Let’s take a look at Bob & Sue’s plan and some key points. On the human capital side, Sue identified the additional education required to become a professor – what it would take in terms of time, money, relocation options. Identified the institution and program. This transition was a huge factor in their life plan – a desire for more family time, for summers off to spend with the children The financial scenarios we prepared for them included short and long term scenarios. They were cutting their annual income roughly in half for the short term, and overall family income would be lower than they had originally planned. The change in family income changed the trajectory of their financial plan. Developed a scenario where long range objectives, though revised, were still on track. Required changes in spending and investment policies. GO TO FLIPCHART AND CHECK OFF STEP 3
The next step in our five step process is where the rubber meets the road. A good plan that sits on a bookshelf, whether for a company or for yourself is worthless. It has been said that a good business plan that is executed well is far better than the best business plan that is executed poorly. Same for your personal business plan. Step 4 is all about implementation – doing what you said in your plan you were going to do. How many in the room today are good at following through with their New Year’s resolutions? As you begin to implement, you need to decide who will do what. Will you do it all yourself, or will you hire professionals such as wealth management firms, career coaches, attorneys and/r other advisors to assist you in the implementation. You need to consider the time required and your own time constraints. Again,, we find that most people spend far more time on implementing their business's business plan than implementing their own plan. HOW MANY OF YOU IN THIS ROOM ARE GUILTY OF THAT? Also need to asses your knowledge and expertise and whether you have the appropriate level. Businesses often outsource to other professionals what isn’t their core competencies – we suggest individuals should consider the same approach
OK, See lets’ check back in with Bob & Sue and see what they did in their implementation phase. For one, they made major changes if their lives to implement this plan to get the to reach their life goals Did have to make sacrifices in order to live with a reduced spending plan – fewer dinners out, less travel/vacations Hired others to assist: Continued to use us for human and financial capital management. Hired realtors. Sue identified a “mentor” at school for herself.
Finally, our last step. GO TO FLIPCHART AND CHECK OFF STEP 4. This last step is the discipline to check on yourself – how well are you doing what you committed to doing? This requires regular, periodic reviews and identifying and making adjustments based on situations as they arise. In this phase you need to ask yourself, Are you hitting key milestones/targets you laid out Are you implementing adjustments Are you implementing on a timely basis?
So let’s check in for a final time with Bob & Sue to see how they are doing. With our help, they have put in the discipline to review their situation quarterly Along the way, as they implemented, things didn’t go perfectly –life happened – so they had to re-adjust their action plans to handle these hurdles, such as Bob’s job and the housing situation But overall, Bob & Sue are happier, feel less time stressed, have given up some material goods for more family time
SO in summary we’ve covered five steps to building your personal business plan, focusing on 3 critical assets, human, financial and emotional capital Tying back to where we started: Step 1 – evaluating your personal situation is answering the question: Where are you today __ POINT TO FLIPCHART Step 2 – Setting goals – Is “where do you want to go and when? Step 3 – Analyzing options and designing a plan answers the question: How do you get there from here? Step 4: Implementing the plan – How Do you Get it Done? Step 5: Monitoring and adjusting answers the question: How well are you Doing? We suggest you do this annually! -- validate these items
As we’ve mentioned before, our philosophy is “Making Life Count – pursuing your dreams, living your passions and achieving your goals throughout your lifetime Are you….
Your Personal Business Plan Stewart S. Koesten, CEO KHC Wealth Management Services Joni Lindquist, President KHC Executive Coaching 10000 College Blvd., Ste. 260 Overland Park, KS 913.345.1881 www.makinglifecount.com
<ul><li>A business cannot thrive without a business plan! </li></ul><ul><li>Neither can you! </li></ul>
Just like a business, you need a plan to achieve your goals! <ul><li>Step 1 : Where are you now? </li></ul><ul><li>Step 2 : What do you want to achieve? (And when.) </li></ul><ul><li>Step 3 : How do you get there from here? </li></ul><ul><li>Step 4 : How do you get it done? </li></ul><ul><li>Step 5: How well are you doing? </li></ul>
Where are you now? <ul><li>Compile Data About Your Current Assets </li></ul><ul><li>Human Capital </li></ul><ul><li>Financial Capital </li></ul><ul><li>Emotional Capital </li></ul>
Human Capital: Education + Experience + Skills <ul><li>Are you……….. </li></ul><ul><li>On the right career ladder? </li></ul><ul><li>Where you’d thought you’d be by now? </li></ul><ul><li>Passionate about your chosen career? </li></ul><ul><li>Take the Career Satisfaction Index TM </li></ul>
Financial Capital: Age + Net Income + Net Worth <ul><li>Do you know………. </li></ul><ul><li>What you earn vs. what you keep ? </li></ul><ul><li>What you own vs. what you owe ? </li></ul><ul><li>Why you own what you own? </li></ul><ul><li>Take Your Investable Net Worth Test </li></ul>
Emotional Capital: Attitude + Network + Communication <ul><li>Do you know………. </li></ul><ul><li>Your level of resiliency and optimism? </li></ul><ul><li>Who shares and supports your interests and passions? </li></ul><ul><li>How to communicate them to others? </li></ul>
Where are you now? <ul><li>Complete a Personal SWOT for each ASSET </li></ul>Financial Capital Strengths Financial Capital Weaknesses Financial Capital Opportunities Financial Capital Threats Human Capital Strengths Human Capital Weaknesses Human Capital Opportunities Human Capital Threats Emotional Capital Strengths Emotional Capital Weaknesses Emotional Capital Opportunities Emotional Capital Threats
Case Study: Bob & Sue’s SWOT <ul><li>Couple in their 30’s </li></ul><ul><li>Both with high powered jobs </li></ul><ul><li>Two young children under the age of 5 </li></ul>What did their SWOT analysis tell them? FC Strengths Substantial income FC Weaknesses High expenses FC Opportunities Rising incomes FC Threats Loss of job HC Strengths Successful careers HC Weaknesses Unfulfilling job HC Opportunities Skills to leverage HC Threats Narrow experience EC Strengths Strong support network EC Weaknesses Feeling burned out EC Opportunities Awareness of problems EC Threats Relational strain
Where are you? <ul><li>What would your SWOT analysis tell you? </li></ul>
Step 2: Now, what do you want to achieve? <ul><li>Dare to Dream!! </li></ul><ul><li>Life Goals </li></ul><ul><li>Career Goals </li></ul><ul><li>Forget about others’ expectations – what does your ideal life look like? </li></ul>
Case Study – Bob & Sue’s goals <ul><li>Envisioned a different life style with more family time </li></ul><ul><li>Both spouses still wanted careers </li></ul><ul><ul><li>But Sue saw that her “accidental” career wasn’t fulfilling </li></ul></ul><ul><ul><li>Dreamed of being a college professor </li></ul></ul><ul><li>Ready, willing to make changes now and had support of others </li></ul>
Step 3:How do you get there from here? <ul><li>Analyze the gaps between where you are and where you want to be…… </li></ul><ul><ul><li>On your career path (Human Capital) </li></ul></ul><ul><ul><li>On your wealth management path (Financial Capital) </li></ul></ul><ul><ul><li>And, with the necessary social support to pursue your passion and dreams (Emotional Capital) </li></ul></ul>
Resources for planning <ul><li>Human Capital - Career Path Plan TM personal development plan </li></ul><ul><li>What skills/education/experience do you need? </li></ul><ul><li>Financial Capital - Comprehensive Financial Plan </li></ul><ul><li>What is important to you about your money? </li></ul><ul><li>Emotional Capital – Life planning – Making Life Count! </li></ul><ul><li>Develop targets, timelines, budgets, investment goals, and ensure asset protection </li></ul>
Case Study – Bob & Sue’s Plan <ul><li>Sue was not qualified for her desired profession </li></ul><ul><ul><li>Identified additional education required </li></ul></ul><ul><li>Completed financial scenarios with anticipated changes in income and spending </li></ul>
Step 4: How Do You Get it Done? <ul><li>Begin Implementation </li></ul><ul><ul><li>Do It Yourself? </li></ul></ul><ul><ul><li>Hire Professionals? </li></ul></ul><ul><ul><li>Consider time, expertise, knowledge </li></ul></ul>
Case Study – Bob & Sue’s Implementation <ul><li>Sue quit job; began education track </li></ul><ul><ul><li>More family time, less stress </li></ul></ul><ul><li>Implemented reduced spending plan </li></ul><ul><li>Relocated to support Sue’s education </li></ul><ul><li>Implemented investment plan with portfolio of moderate growth </li></ul>
Step 5: How well are you doing? <ul><li>Need periodic reviews and adjustments: </li></ul><ul><li>Are you: </li></ul><ul><li>* hitting milestones? </li></ul><ul><li>* making adjustments as you hit barriers? </li></ul><ul><li>* making adjustments as the world changes or you change? </li></ul><ul><li>* implementing on a timely basis? </li></ul>
Case Study – How are Bob & Sue Doing? <ul><li>Reviewing and updating their situation quarterly </li></ul><ul><li>Generally hitting key milestones </li></ul><ul><li>Faced hurdles – housing, Bob’s work situation </li></ul><ul><li>Re-adjusted action plans </li></ul><ul><li>Spouses happier, less stressed; children healthy & happy </li></ul>
Operate as if You are a Business Build & Execute Your Personal Business Plan <ul><li>Evaluate your personal situation </li></ul><ul><li>Set goals for your life </li></ul><ul><li>Analyze options and design a plan </li></ul><ul><li>Implement the plan </li></ul><ul><li>Monitor and make changes as needed </li></ul><ul><li>Do this annually !! </li></ul>
Our philosophy….. <ul><li>‘ Making Life Count!’ </li></ul><ul><li>pursuing your dreams, living your passions and </li></ul><ul><li>achieving your goals throughout your lifetime. </li></ul><ul><li>Are you Making Life Count! ? </li></ul>