Thinking about retiring and selling your business? Are you afraid you may not have enough income to carry you through retirement? If so, don’t sell. Half-retire with Paradigm Strategies’ new Half-Retirement 6-Step Program!
Half-Retirement© is a new and exciting program that is a great alternative to selling your business. Work just 2 to 3 days a week, doing the work you enjoy, while keeping your existing income.
Together, we create a customized roadmap for your success, then work side-by-side to implement it. And down the road if you then decide to sell your business, it will be worth more.
Our Half-Retirement 6-Step Program is ideal for business owners who:
- Realize that the anticipated proceeds from the sale of their business will not provide their existing income.
- Want to keep their business and income but remove the ownership headaches
- Desire to slow down but not sell their business
- Are concerned about boredom during retirement
- Still enjoy portions of their work but wish they could remove portions they dislike
Here are the details of our Half-Retirement 6-step program:
Step 1 – Create Magnetism
You cannot Half-Retire© without a solid commitment to make it happen. It is much easier to have a strong positive force “pulling” you towards Half-Retirement© than hard work “pushing” you toward it. What is your “why” for Half-Retirement©? Is the magnet, or reason, strong enough?
To determine your pulling force, you need to ask yourself these 4 questions:
- What work do you ENJOY?
- If the business would run perfectly, and there was no financial impact, what work would you stop doing immediately (i.e., what work do you dislike?)
- If your business ran perfectly with you working only about two days a week, what would you do for fun?
- If you keep going “as is,” what will it cost you mentally, physically, and financially?
These answers will help you create the magnetism you need to make your Half-Retirement© dream possible.
Step 2 – Adopt a Half-Retirement Mindset
In order to get the most from Half-Retirement© some old mindsets NEED to go. You MUST make room for the new Half-Retirement© mindsets. By adopting the right mindset, the Half-Retirement© process can move faster and have a much greater likelihood of success.
Mindsets like these need to go:
- This business is your baby
- No one does it as well or as fast as you
- Structure built with the owner at the center
- The only person with permission to fail is you
- Corporate culture of urgency
- Trust as a shortcut for systems
These mindsets speed up Half-Retirement©:
- Egoless (no need to be needed)
- Teacher versus doer
- Technology lover, not necessarily a techie
- Insistence upon scale and repeatability
- Productiveness = success, not just being busy
- Systems and controls
To create the correct mindset, you need to follow these 5 steps:
- Assess your current Half-Retirement©
- Rank your current state of mind.
- What mindset shifts are needed for you to achieve your Half-Retirement© goal?
- Pick one that you feel you can adjust in the near future and commit to changing it.
- What will you do to accomplish this?
Skipping this step WILL be detrimental to your Half-Retirement© success. A Half-Retirement® Mindset releases the progress emergency brake. This mindset helps you grow your business and your team.
Step 3 – Untangling the Owner from the Business
Finding Your Picasso Work™
What are the qualities of Picasso? Only Picasso can touch the brush to the canvas. Like Picasso, your goal is to only perform the tasks only you can do best. Virtually everything else is delegated. A great example of this is the medical field, specifically surgeons. In a typical surgery, only surgeon participates in the actual procedure while all other surgery related tasks are delegated.
To accomplish this, you begin by plotting your tasks on a delegation grid. The grid consists of quadrants. The bottom left quadrant is “Low Value, Low Frequency” tasks; the bottom right is “Low Value, High Frequency ” tasks; the top left quadrant is “High Value, Low Frequency ” tasks; and the top right quadrant is “High Value, High Frequency ” tasks.
Next you draw a line from the bottom left corner of the grid to the top right corner – your line will be at a 45-degree angle. Then you begin to delegate the tasks below this line. Once these tasks are delegated, you start delegating the more complex task above the line. Eventually you will be left with a handful of complex tasks that only you can do best – your Picasso Work™. These are the tasks that you keep and perform regularly.
Please keep in mind that when delegating, only work that can be done correctly without supervision should be delegated. When your employee first takes on a new task, assignment, or responsibility, they will need support, so please provide training, tools, auditing, feedback etc. as needed to assure success. And lastly, always be clear, patient, and supportive with your new delegee.
This is a tool to help you better organize tasks prior to delegating them. FEVER is an acronym for Fractionalize, Eliminate, Virtualize, Efficiency and Rethink. You use this process in the following way:
- Rethink all your tasks after creating a task list
- Eliminate unneeded tasks
- Efficiencies are created with the remaining tasks
- Virtualize tasks where needed – create videos
- Fractionalize (further break down) the more complex tasks and delegate specific portions
Now that you have organized your tasks, you are now ready to assign them. But before your start delegating, please remember these points:
- Only work that can be done correctly without supervision should be assigned
- When your employee first takes on a new task, assignment, or responsibility, they will need support
- Please provide training, tools, auditing, feedback etc. as needed to assure success
- Always be clear, patient, and supportive with your new delegee
Tiered Delegation™ is a 5-part delegation process that allows you to effectively assign your tasks.
- The first thing is to assign 20% of your total tasks. These should be easy tasks that do not require training and supervision.
- The second part involves quick tasks where light training will be needed. Employees with aptitude who are self-sufficient are ideal for these assignments. These will include 50% of your assigned tasks.
- This part consists of 12% of your delegated tasks. These consist of easier higher-level tasks and responsibilities that require more in-depth training and supervision. Therefore, this training requires patience, organization, discipline, and documentation.
- The fourth part includes more advanced high-level tasks and responsibilities – 10% of your assigned tasks. This step requires patience, organization, discipline, and documentation as well.
- The final part consists of your non-delegated tasks and responsibilities. These are duties ONLY you can accomplish. This includes your Picasso Work™ and “special” tasks that only happen occasionally and are not worth training someone to do. But over time some of these responsibilities may be delegated as the business grows.
Measure, Assess & Refine
Prior to using Tiered Delegation™ you must be able measure your success. To do this you need to establish specific delegation objectives and action steps. These goals must be measurable and regularly assessed to ensure effective progress. Keep in mind that you may need to refine your delegation plan based on your success. And you continue this process until you are only performing your Picasso Work™.
Step 4 – Re-Leverage Your Assets
Every business has under-utilized assets. These assets include your business model, sales and marketing, finance, operations, R&D, and management/HR. The most effective way to re-leverage your business assets through strategic planning. A simple growth plan consists of 5 steps: SWOT analysis, vision, key objectives, strategies, and tactics. This plan can be created in about 8 hours (four 2-hour meetings) and consists of 2-3 pages in length. An effective strategic growth plan provides focus, direction, accountability and insight for you and your team. Something that is truly needed if you are taking a step back in your business.
Step 5 – Setting the Auto Pilot
The next to last step of our Half-Retirement 6-Step Program is about keeping tables on your profit margin.
Profit is not a manageable activity, it is the result of activities that are linked to profitability such as your sales and marketing efforts, your employees’ productivity, management of your cost-of-goods-sold and overhead. Performing these activities more effectively is what leads to greater profit.
KPIs for Everything
Reviewing your financial statements regularly is imperative, but the downside to this is that you are only reviewing historical data. You are only analyzing your business retrospectively. To make better business decisions you need to examine your results in real-time. This is where KPIs come in.
Key Performance Indicators (KPIs) are quantitative business metrics that measure a specific criteria’s performance. They are your key economic drivers. KPIs “add up” to profit. If your KPIs are in line, profits will come. The most common KPIs include: Net Margin, Gross Margin, Accounts Receivable Turnover, Current Ratio, and Quick Ratio.
Every business has 5-7 economic drivers. You must determine what these KPIs are for your organization then measure and review then regularly.
Manage by Flash Report
A Flash Report is a measure of change. It’s a one-page report that helps you assess the key performance indicators of the company. It consists of three sections: liquidity, profitability & productivity. The Liquidity Section tells management about the cash situation of the firm. The Productivity Section gives an indication of the key performance metrics of the business. The Profitability Section gives a rough indication of how much money the company has made during the period of measure.
This report can be created in about thirty minutes by your controller or bookkeeper. To be effective this data should be at least 80-90% accurate and this report should be reviewed weekly or bi-weekly. Flash reports are a game changer in the business world because they allow small business owners, like you, to effectively manage and grow their business.
Redesigning Your Financial Controls
Financial controls are the procedures, policies, and means by which a company monitors and controls the direction, allocation, and usage of its financial resources. Financial controls are at the core of resource management and operational efficiency in any organization.
To assure business funds are secure you will need to improve your financial controls. To accomplish this, you will need tight control over cash disbursements. This can be accomplished by limiting access to your accounting system as well as the signing of checks. You also want to make surprise accounting audits and inspections and require audit trails in your accounting system. We additionally suggest performing background checks on all new hires and implement IT controls to prevent phishing & hacking.
Management by Walking Around
Management by Walking Around (MBWA) is a style of business management. It involves the owner walking around throughout the workplace to check on the status of ongoing work, communication, employee morale and productivity. By random sampling of events or employee discussions, it is more likely to facilitate operational and managerial improvements.
MBWA, properly implemented, sends a positive message to those responsible for your organization’s success–your team members. It demonstrates your interest in them as individuals and in the work they do. And it also permits you to stay in touch with the pulse of your organization while conveying a positive example of leadership.
Step 6 – Enjoying Half-Retirement©
Now that you have completed steps 1 through 5 of the Half-Retirement 6-Step Program, it is time for you to begin your Half-Retirement© journey. To do so you first need to review your Dare to Dream & Mindset documents and commit to one dream item and adopting 2 or 3 new mindsets.
With this complete, you next need to create and implement your Half-Retirement © Plan. With your plan complete, you now start taking off one day, or 2 half days, a week. Next, take note of what happens when you are away – good & bad. Review these notes and systematically repair weak systems until they are all running smoothly.
If you would like to speak with us about our Half-Retirement 6-Step Program or have a business question or issues you would like to discuss, please feel free to reach out to us through our website Contact page.