Take a Look at the Numbers

Like most business owners, looking at the “numbers” is an important part of my daily activity. And the numbers can mean many different things. For us it could be the applications submitted, placed and pending. Or it could mean the commissions and overrides that come in each day. But in the end- it truly is all about the numbers.

Numbers may not be your best friend if you went into business for passion or creativity. Numbers need to become your best friend to stay in business for the long haul. Your business budget and accounting system should show you a full picture of what’s happening underneath the hood. It gives you insight to what aspects of your business are the most profitable and much more. Here’s why you need to review your financials regularly:

Stop Doing What’s Not Working

One of the top benefits of doing a business financial temperature check frequently is having the foresight to not waste time on areas that aren’t doing well. The end of the year is often the time where we circle back to recap the whole year before making changes.

The problem with this approach is that you could miss out on opportunities during the year. Check to see which jobs and clients are paying you the most money and think of ways to do more of those tasks. Consider putting an end to certain services that take up a lot of your time but don’t make a lot of money.

Keep Tabs on Your Cash Flow Before it Gets Ugly

You shouldn’t be waiting weeks or months to collect on invoices. One day you’ll wake up with a sad-looking bank balance and realize that you’re having a serious cash flow problem. Setting a weekly appointment to check your financials can give you the reminder you need to follow up on outstanding invoices. You can even hire a virtual assistant to help you send and collect on invoices so you can keep cash flowing properly.

Double Check Accuracy of Recurring Expenses

Business expenses these days are a lot like personal expenses. You sign up to put them on your card and the monthly transactions happen automatically.

When was the last time you reviewed your recurring bills to make sure they’re correct?

If you haven’t in a while, make sure your service agreements are matching up to what you’re currently paying. I caught a price discrepancy last week after comparing a recurring business charge with my plan. I was unaware I was being overcharged for about a month. Dig into the details because there may be money to save.

Look Beyond Revenue to Measure Your Success

You read a lot from business owners about revenue. We talked about expenses above, but I want to take home the fact that revenue is only part of the story. The full story should include a comparison of the expenses that are incurred to earn the money you do. Put plainly; your goal shouldn’t only be to increase your revenue. You may feel great about reaching your goal of earning $10,000 in one month, but if you spent $8,000 on ads and other operating expenses to earn it that variable needs to be considered closely.

Expenses can grow as your business grows so make sure that you’re bringing in enough profit to meet your own goals. Review the products and services that you invest in routinely. Ask yourself whether or not each of your business expenses are valuable. It’s true you may need to spend money to make money, but be smart with where you’re spending this money.

Final Word

Looking at your business finances with a critical eye doesn’t have to give you a heart attack each time. You can only hide from what’s going on financially for so long before it will impact your ability to perform and pay your bills.

Business accounting is more than just sending and receiving invoices. The overall picture needs your attention as well. Thankfully, once you start committing to regular financial check-ins it gets less scary.

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Preparing for Retirement

Most Working Americans Are Not Prepared For Retirement

Today, many Americans are stressed about retiring. Most of them are not taking the proper steps to prepare financially. According to recent research by the Employee Benefits Research Institute, most Americans who report feeling stressed about retiring also report feeling financially insecure. In their study, the researchers found that 30 percent of participants felt stressed either emotionally or mentally in relation to retirement preparation. Another 30 percent said that they were worried about finances during their workday. About 50 percent of the workers who reported feeling stressed said that they would likely be more productive at work if they did not spend so much time worrying.

About 50 percent of all survey participants said that health care or financial planning programs would benefit their productivity levels. However, most workers did not report taking steps to seek such services. About 60 percent of all survey participants said that they had done some planning and saving for retirement. Only 40 percent reported trying to calculate an accurate amount of money needed during retirement. Some participants also spent time calculating how much money they would need from Social Security in the future to survive. About 35 percent of workers had calculated their estimated living expenses during retirement.

When asked about seeking help from a financial adviser, only about 20 percent of participants said that they had spoken with a professional regarding retirement planning. Approximately 10 percent reported already having a formal plan that was feasible and realistic. Researchers pointed out the importance of working with a financial planner. Also, they emphasized that people can do many things on their own for free such as calculating Social Security income. Also, people can review their expenses on their own and speak with a financial planner about estimating realistic future costs.

After interviewing both workers and retirees, EBRI researchers said that retirees were more likely to report feeling confident about their savings and income. Over 80 percent of those who were already retired reported feeling comfortable. About 60 percent of those who felt confident said that they were very sure of having future income that they would not outlive. In contrast, less than 20 percent of workers who were surveyed felt confident about having enough money to live on during retirement. Savings incentives such as contribution matching were noted as important considerations by the researchers. They recommended that employers offer education about retirement saving, provide attractive plans and encourage participation in multiple ways.

We can help! We have programs that can get you started in the workplace environment. To learn more about helping workers save for retirement give us a call.

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AIG Brings Value

Time with Ready-to-Go Prospecting

You need more time, we get it. Save a ton of time by using our content that is ready to use with the click of a button. No matter what age your client is, we’ve got tailored content that will work for them.  Are they a Generation Xer? A Baby Boomer? A Millennial? No problem.  Check out the prospecting tools on Generation Matters to engage prospects in the life insurance conversation.

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Thomas Freese – The Guru on Question Based Approach

Stop “Probing For Pain”

by Thomas Freese

Trying to uncover a customer’s pain points is a mistake that’s not only costing companies a ton of money in terms of lost revenue and missed opportunities, it continues to be promoted amongst sales teams all over the world.

“Easing a customer’s pain” may seem like a nice gesture, but the notion of probing for pain (only) contains two illogical flaws in today’s selling environment. First, focusing on prospects who are currently experiencing pain significantly reduces the size and scope of your target audience. While everyone agrees that people who are ‘in pain’ are indeed motivated to find solutions, it turns out that decision makers and influencers are just as motivated to purchase products and services because of many other factors.

Technology titan Apple, for example, has sold over a billion (with a “B”) iPhones since 2007, and they generated $9+ billion in iPod revenue before that. How many iPods and iPhones do you think were purchased because the customer was in some sort of pain?

It turns out that customers purchases products and services based on a wide range of decision factors. Whether you sell technology solutions, manufactured goods, employee benefit packages, or healthcare services, the decision to acquire your product or service may be driven by something as simple as the desire to achieve a goal or satisfy specific business objectives. Potential buyers can just as easily be motivated by wants, needs, or an opportunity to improve their existing condition.

So, why would you want to limit the size of your audience to only focus on customers who are currently experiencing pain, when the larger opportunity includes prospective buyers who are just as driven to acquire solutions to address any number of other wants, needs, goals, objectives, and desires?

In addition to limiting the size of your target market, the second flaw with the strategy of uncovering the customer’s pain points is that it can come across as highly offensive to the people you are so desperately hoping to influence. If you call on customers who are either territorial or proud of the work they do, good luck bonding with them by trying to expose their flaws, faults, and deficiencies.

Case in point, if you call on a Network Manager and ask: “So, what problems do you have managing your data?” Predictably, their knee-jerk reaction will likely be to say, “We’re doing just fine, thank you (click).”

Even if you mean well, probing for pain is a high-risk strategy. Trying to expose a customer’s weaknesses, or shining a light on their oversights, is one of the quickest ways to put people on the defensive. If you really want to get under the customer’s skin, try firing off a series of pain-oriented questions like: “So, what mistakes have you made?” “What decisions do you regret?” Heck, you might as well ask them, “How ‘come you’re still employed here?”

Fortunately, there’s a proven antidote to this old-school practice of attacking the customer’s ego. All you have to do is reverse the premise of your questions. Instead of ‘chipping away’ at the customer’s pride by trying to indict the status quo, or continually exploring what’s wrong, a more thoughtful salesperson could just as easily ask (an IT Manager, for example), “How important is securing the data on your company’s network?” When talking with an HR Director, you could ask, “Would you be interested in a cost-effective way to expand your company’s employee benefits package?” A better way to explore a Facilities Manager’s needs in a manufacturing plant might be to ask, “Would you be open to a couple of ideas on how to improve your plant’s overall operational efficiency?”

Before you start dialing the phone, or begin crafting a bunch of clever one-liners to take out into the field, it’s important to recognize that an effective needs development strategy requires more than a single ‘magic’ question. That’s why I’ve written multiple books on the subject.

For our purposes here, I’m merely pointing out that “probing for pain points” is one of the most common mistakes sales teams make. On the other hand, salespeople who focus on helping their customers satisfy a broader range of goals, wants, needs, and objectives can significantly increase their own sales results.

Here’s the best part. Exploring decision drivers that extend far beyond just uncovering “pain points” is actionable on your very next customer call—that is, if you are open to a couple of ideas.


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Tax Reform and Business Planning

Whenever there is a new Tax Bill we can find opportunities. With the Trump Tax Bill most of the opportunities are in the corporate world. Part of Trump’s reasoning is that if we give tax cuts to the business it will trickle down to the employees. This may be true, but it is also true that the owners of the business will see some “trickle down” too. That might be where the “real” planning opportunity is. Here is a brief summary:

Choice of entity

Choice of entity depends upon tax and non-tax factors. All such factors should be considered when deciding which type of entity is most advantageous. From an income tax law standpoint, the new 21% flat tax on C corporations is attractive. For some business owners, the first instinct might be to change to C corporation status. However, profits of C corporations are still subject to double taxation when distributed to shareholders. Also, if the C corporation sells most or all of its assets to an outside party (often referred to as an “asset sale”), the sale may be subject to double taxation.

Business owners of pass-through entities are subject to one level of taxation based on individual tax rates with a possible 20% tax deduction against their pass-through income. However, the 20% tax deduction may be reduced or eliminated based on individual taxable income and other factors. The possible reduction or elimination of the 20% tax deduction for pass-through income would be an important factor to consider, particularly for business owners of profitable S service corporations. If an S corporation converts to a C corporation, no immediate gain or loss is generally realized upon conversion. Once the S election is revoked or terminated, however, the corporation cannot elect S status again for five years without IRS approval.

Business planning and life insurance

 In larger C corporations that were previously subject to the alternative minimum tax, cash value life insurance may be more attractive in the absence of that tax. For some business owners, an executive bonus to a key employee that increases deductible wages may result in a higher qualified business income deduction by raising the wage portion of the calculation. This may increase the appeal of an executive bonus or restricted bonus plan.

With a lower business tax bracket, some business owners may revisit their qualified plans if these plans are the primary vehicle for their retirement funds. With the sunset provision for lower individual income tax rates, business owners may be receiving qualified retirement distributions in a higher tax bracket. A simple non-qualified bonus plan funded with life insurance may be attractive as a supplement to qualified plan benefits.

Personal planning for business owners

Since the new deduction for qualified business income is applied on the basis of an individual owner’s taxable income, taxpayers who own a pass-through business may wish to consider planning steps at the personal level. These may include making charitable gifts, deferring income, and accelerating deductions to manage taxable income levels. A business owner whose spouse has high earnings or income even from an unrelated business may be subject to phaseout of the deduction based on the taxable income on their joint return.

Cross purchase buy-sell arrangements

 Many small business owners, particularly in businesses with two or three owners, may prefer to own the policies on themselves that are used to fund a cross purchase agreement, but may have been advised against it. This is due to (a) possible estate inclusion of both the business and the life insurance death benefit, (b) the need for a split dollar agreement and yearly inclusion of the value of the economic benefit, and (c) possible “transfer for value” concerns which may cause a portion  of the life insurance death benefit to be considered taxable income to the beneficiary of the proceeds. With the increase in the estate exemption to over $11 million, more owners might find owning the policies themselves more appealing (assuming there’s no “transfer for value” problem).

Key employee retention and retirement

 The underlying reasons for these arrangements — to recruit, reward, retain and retire top employees — are unchanged. Bonus plans, non-qualified deferred compensation plans, and split dollar arrangements are commonly used to achieve these goals. The reduced taxes mean that more funds may be available for these plans.


The changing tax environment is a great time to look at business planning goals, such as succession planning, business protection, employee retention, and protection of business owners’ families and lifestyles. The income tax reductions may make more funds available for meeting these goals. In addition, business owners might find that a bonus arrangement or other change in wage structure could offer a more favorable outcome for the new qualified business income deduction.

While many of the benefits of the Tax Cuts and Jobs Act are set to sunset after 2025, the basics and benefits of planning never expire. As with all business planning strategies, it’s vital that businesses consult with local counsel for detailed tax and legal advice. This is your opportunity to be the quarterback on the planning team. Knowledge is power.




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Thinking About Selling Your Insurance Agency?

There are many reasons why you may be considering selling your insurance firm. Maybe you are reaching retirement? Perhaps you need to sell because of unforeseen personal reasons? Or, are you simply looking to capitalize on the favorable conditions at present? Many would agree that there is no better time to sell an insurance company, as more and more people are investing in their well-being and assets and purchasing insurance. Below, we take a look at the different factors you need to consider when selling your insurance company.

Diversifying your client base

Of course, you will want to ensure you can secure the highest possible price when selling your insurance firm. There are a number of different ways you can do this. One option to consider is diversifying your clientele. There are many businesses in the insurance sector that have one or two big clients that make up the vast majority of their revenue. A buyer is going to see this as a huge risk. What if one of the clients up and leave when someone new takes over? To make your firm more attractive, you should diversify your clientele.

Is your service up to scratch?

You also need to focus on providing the best possible customer service. People so often get frustrated with insurance providers. They feel they can never get a straight answer or that it is difficult to get the help they need. Make the effort to be different. Reinforce customer relationships by checking up on clients. This will enable you to boost your retention rates, which can only be a good thing when selling your business.

Focus on group plans

You should also focus your attention on group plans. Group plans can be tough to secure, but they tend to be the best source of revenue for insurance companies. Of course, you shouldn’t forget about individual plans, but if you can secure a number of group plans, this can help to make your business more appealing, which can result in greater profit made when you come to sell. If you are finding it difficult to secure group plans, you should consider offering extra services to help you win the bid.

Keep selling

It may sound obvious, but your sales volume is of paramount importance. Once you have decided to sell, it can be easy to lose the will to secure new business. However, business valuations in the insurance sector have a large reliance on profits and revenues. The overall value of your firm is going to decline if your books decline, so it’s important to make sure this doesn’t happen. Boosting sales should be part of your long-term strategy, so focus on developing an effective sales team. Offering incentives is a great way to foster healthy competition and boost results.

There is a lot to consider when selling an insurance business. Nevertheless, if you follow the tips that have been mentioned above, you can increase the chances of selling your business, and you can ensure you do so for a tidy profit. It is all about making your firm as attractive as possible to potential buyers.



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Update Alert- DOL Fiduciary Rule

DOL Files “Notice” with OMB regarding Delay of Fiduciary Rule Transition Period

The effort to extend the DOL Fiduciary Rule’s Exemptions’ Transition Period has moved a step forward and is now again under OMB review.  It’s interesting to note that OMB’s website lists its stage as “Notice” instead of “Final Rule.”  That term makes it unclear if it is the final rule on the extension so that when OMB releases it, DOL can publish it in the Federal Register.

If this is the final rule to be issued, we won’t know the text of the rule until it is published in the Federal Register, but the title on the OMB’s website is: “18-Month Extension of Transition Period and Delay of Applicability Dates; Best Interest Contract Exemption; Class Exemption for Principal Transactions; PTE 84-24,” which suggests that it is still an 18-month extension (until July 1, 2019).

See https://www.reginfo.gov/public/do/eoDetails?rrid=127677.

If you have any questions, please don’t hesitate to contact us.

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