When it comes to your finances, are you a Stage 1 or a Stage 4 White Water rafter?

This economic meltdown has many people second-guessing the financial decisions made in the last 8 years. Where do you stand, and what can you do about it?

Last summer we shot the Snake River rapids in the Grand Tetons. Like many rapids, the river offered its “flat” moments (stage 1), and churning moments (stage 4). One time we prepared ourselves for a level 4, and were hit by something unexpected, hail. In the middle of summer we turned a corner and were pelted by hail stones in the face during a storm.

I think many of us can relate to this in the current economic times. But, the extent of damage depended on whether you operate your business (and personal finances) in a stage 1 or stage 4 rapids.

I found there are two main types of business and investment personalities: One type are those who lived during the depression, or learned by it. They are very conservative in what they do, and try not to be too speculative in whatever they do. The other type is the sprinter. Many of these sprinters profited handsomely in the past 8 years riding the leverage train of real estate. In their business, also, they seem to leverage heavily.

When I work with clients’ strategies, I keep these two polar positions in mind. If a client is younger, then they can obviously take more risks. However, when a client approaches middle age, I caution them that the downside is more severe if they do not meet their objectives. So, both in personal and business opportunities I recommend the following:

1. Always have a well thought-out strategy. What do you want to accomplish?
2. Don’t fool yourself with the possible outcomes. Look at worst case scenarios.
3. Plan for both your intended outcome and your worst case scenarios.
4. You may want to reduce your risk, just in case the worst case scenario occurs.
5. Execute the plan and view it objectively. Too many business persons in this position extend their risk because they are looking for the “next big deal.” I find this rose-colored glasses approach a major cause of business failures.
6. If you are hurt by the resent economic melt-down, adjust your strategy towards a stage 1, but don’t circle the wagons. Keep a sharp lookout for business opportunities that may pay handsomely when the economy recovers.

We work with our clients in strategizing and executing their dreams. Let us work with yours.

21st Century Business Communication

Are you including internet technology as part as your business strategy?

I remember when I was a little boy, how I used to marvel at the futuristic gadgets that Walter Cronkite would display in the Sunday night program, The 21st Century. The program was designed around scientific advances that could re-shape our lives in the next century. The 21st Century seemed so far away to a little boy in the 1960s. But here we are.

In the 1996, my interest was piqued with Bill Gate’s books, The Road Ahead. In this book, Bill Gates predicted that we were nearing a society where financial transactions, product research, file transfers, and such could be transacted though the internet on a device the size of a checkbook.

How ironic, within the next decade, Steven Jobs would spearhead the invention of the Iphone. Users now bring up all sorts of applications including social networks like Facebook, MySpace, etc. These social networks are becoming the foundation of the new business communication.
But, what about the impact of these social networks on business? Can business take advantage them?

The answer is a guarded “yes.”

The advantages of such networks are communication and visibility. Implemented correctly, vehicles like MySpace, LinkedIn, Twitter, blogging, and others can enhance your company’s visibility, and draw the world to your web site. With increased visibility comes opportunity.
There is a downside to these opportunities, however. Employees can post criticism on blogs that may hurt the firm’s reputation. In addition, the opportunities with any of these networks can be a bottomless pit sapping into employees’ time with no immediate response.

Like any tool, the internet can be the piece of your strategy that increases your market share, if used correctly. If used incorrectly, it could be a wasteful tool.

When we strategize with our clients, we consider such issues and work with professionals who can help execute it.

We’re not your ordinary CPA Firm.