Professional architectural, engineering, railroad, and utility companies who perform work for government agencies are generally required to have an independently audited overhead rate. You calculate this rate by dividing total allowable indirect expenses over direct labor but getting to this step and optimizing this result involves some effort.
It might seem as you're jumping through hoops to satisfy a regulatory body, but that's only partially true. If you're working in this space, your livelihood and success depend on your ability to be fully reimbursed for your eligible costs and make the right decisions on future contracts. These are just a few of the reasons why understanding and optimizing your overhead rate are vital.
I have enough money to live comfortably for the rest of my life... If I die next Thursday.” - anonymous
I’ve been told , more times than once, “I do not plan to retire” or worse, “I have no plans to retire and I am not considering even thinking about retiring for the foreseeable future.”
But just because you will never retire, “never” does not mean you forget about goals and metrics to judge your success. And that is just what this article is about, The Earliest Possible, Maximally Strategic Date to Die
Your business is not perfect (whose is?) but your business needs you to make it at least perfect enough. How long do you need to hang on before you correct all of your “grave” errors? That is what you will learn below.
That’s right. Read on and when you are finished, you will have computed the number of months you must remain above ground.
But first, who is this dark dissertation not for?
If at first you don't succeed, give up and try something else.”
- Homer Simpson
It may seem counterintuitive to joke about throwing in the towel, but the truth is that not every business was meant to succeed. So many of us are given the advice that if we just try hard enough, work smarter, or are resilient, that success is there for the taking.
While it's true that you want to give any endeavor your best shot, you also don't want to lose everything or quit too soon. Many business owners seem to wear their own set of blinders that don't allow them to see when it's time to draw a line and give up.
But businesses do fail and with shocking regularity. If you wait too long, you could lose much more than if you had taken action just a bit sooner. Here are some eye-opening figures about business failures and a list of key indicators that it might be time to shut down your business.
Fifty years after The Beatles first sang, “Will you still need me, will you still feed me, when I’m 64?” baby boomers are asking the same question of the businesses they own.
Pre-recession business owners busied themselves growing their companies, often assuming their values would increase with a go-go economy and that they eventually could cash out with ample sums to live in comfortable retirements.
Unfortunately, those assumptions did not always hold true. Boomer business owners must now decide whether to sell their companies for less than they had once hoped or to work longer than they had planned.
Planning your exit from your business can feel at times like planning your will. Why do it today when you can do it tomorrow? After all, you are not planning on leaving this earth today, right?
Your exit from your company, however, is assured. Whether you leave it feet first or walk through the door, you will leave your company someday. Why not do it on your terms?
Owners depend on their businesses to support them today, and more importantly, they depend on them to support their families, their retirement, and their way of life in the future. What assurances do you have that things will go as planned? Reports have shown that 8 out of 10 business owners do not know what they need to do today to have a successful business transition in the future.
It’s a simple question but it is not always easy for an entrepreneur to answer when selling their business.
You invest so much of yourself into your business that it can be hard to distinguish where “work” ends and “life” begins. But selling your company may require you to cleave one from the other. Will you survive when you do?
As a business owner, you are accustomed to, and perhaps even thrive upon, solving today’s pressing problems and pushing on to tomorrow. But have you looked beyond this week, this month, or even this year?
The average owner spends 80,000 hours building their company but only six hours planning its transfer. As a result, 80 percent of business owners fail to get top dollar when they sell.
Just as winning the lottery is not a vible strategy for achieving your dreams, nor is hoping to sell your business for enough money to support your future lifestyle. That is like winning a free lottery ticket on a drawing for a $1 million jackpot. They won, but they missed a much larger prize.
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