Question: My partners and I have previously built several very successful businesses, with the last one selling for over $7 million. We’ve been invited to participate in a dot-com enterprise, but felt totally out of place and uncomfortable when we went to make a presentation to the company. How could this be?
Answer: You feel that way because you probably just don’t get it!
In this dot-com space, the new kids on the block don’t care what you’ve done, where you’ve come from, etc, etc. They care about whether you instinctually understand how an Internet economy works.
This requires you to make some profound changes as well as some basic ones, like changing your dress code. (Jeans and T-shirts are preferred over suits and ties.)
You also have to “think different,” as the computer ad goes. What you already know about raising capital and running a business from bygone decades is totally different from what Internet entrepreneurs value today.
Having said that, I’ll also give you some peace of mind. While doing business may be different, your years of experience and performance have provided you with credibility, management experience and important relationships.
These things are not to be discounted by any means. The new kids on the block need to partner with professionals with your kind of track record.
So trade in your Gucci loafers for some Nikes, get with the program, and use your talents wisely. The results will totally knock your socks off.
Q: I’ve been driving myself pretty hard while starting my home office. I didn’t realize how difficult working from home would be, even though I have a full-time babysitter taking care of the kids. I’m concerned about my health with all this additional stress. Do you have any recommendations?
A: Even though I’m a consultant and not a physician, I would first recommend you see a professional if you’re that concerned about your stress level. I can, however, give you some personal advice on how to balance your business and physical well-being.
To tell you the truth, you’ve already taken the first big step toward getting healthy asking for help.
Here’s what I try to do to relieve stress from my daily routine:
– Exercise. Take 15 to 20 minutes a day. It’s so good for your body and your mind. I take the phone with me, just in case. I suggest you turn it off.
– Listen to relaxing music. Play it while you’re working. You won’t even notice it, but it will have an impact anyway.
– Get regular massages. These are invaluable and relieve pressure from stress along with unwinding the kinks in your neck that come from talking on the phone, sitting at a desk and working at the computer.
– Eat healthy and take vitamins.
– Drink lots of water and cut down on your caffeine intake.
– Soak in a hot tub with lavender or other stress-relieving oils that you’ll find at your local spa.
– Take a day off now and then. If you can’t take a vacation, maybe you want to spend a few long weekends with your spouse or best friend. (Leave the kids and pets at home.)
Q: My financial planner invests my personal money and my company’s capital. However, she appears to be far too conservative with both. I’m a risk-taker and would like to have the same approach taken with my investments. Do you agree with this strategy?
A: Yes and no. We wouldn’t be in the current bull market if it weren’t for entrepreneurs like you taking risks. And the stock market sure has been good to us over the past 10 years.
But a dose of reality may not be a bad thing. Having a financial planner who is grounded can be a good thing, especially with the volatility we’ve been experiencing. While we all want to take advantage of prices going up, many of us would not be too happy with the reverse.
As far as your company capital is concerned, you may want to err on the conservative side, depending on whether or not you have shareholders or other investors. After all, you may need the money for opportunities in your business, so investments should be shorter-term and very liquid.
With regard to you personally, take a chunk of money call it play money if you like and either ask your planner to invest it more aggressively or give it to someone else who has a good track record playing the long shots.
Unless your financial planner is not investing wisely, I don’t recommend taking all of your money and putting it on red. Investments are for the long term, so portfolio performance shouldn’t be examined on a day-to-day basis but rather over a five- to 10-year period of time.
Q: The passing of the income tax deadline has me wondering what new tax laws went on the books covering the current year. What should I be aware of?
A: I’m not a tax expert, so I definitely recommend you find one for the most current information on this subject.
I have heard that by late 2000 the IRS is planning to unveil its centralized small business and self-employment unit to deal primarily with that sector’s 40 million taxpayers.
Among other things, it will be looking at the distinction between employees and independent contractors, as determined by where they actually work and who directs their workload.
If you are self-employed, don’t forget to track these deductions interest payments, home office expenses and health care premiums.
If you own a small business, take note that most small companies prefer the cash method. However, the IRS says that if you have inventory of any kind related to sales, you are prohibited from using the cash system.
Lorraine Spurge is a personal finance advisor, author of “Money Clips: 365 Tips That Will Pay One Day at a Time,” and business news commentator. She can be reached at (818) 705-3740 or by e-mail at [email protected].
