W2 Healthcare Partners: Fill & Download for Free

As Master Sensei of Hedgeable I can address how the venture investing works, what we are investing in, and how selections are made -Executive SummaryHedgeable was the first digital wealth manager (Robo-Advisors) to offer venture capital investing to clients. As of the time of this writing (early 2016), all Accredited Investors that are Hedgeable clients are eligible for any venture fund. There is no additional fee for this feature, and the minimum investment in the fund is $1. Hedgeable mainly relies on top crowdfunding platforms like AngelList (company) to source investments, typically co-investing with the top venture capital firms in Silicon Valley.Fund Structure & Investor StatusHedgeable’s Venture Capital funds are formed in Delaware as Partnerships. They have a distinct Tax ID and registered agent in Delaware that is separate from the Hedgeable corporate entity. Hedgeable serves as the General Partner, while all investors are Limited Partners. The General Partner makes investment decisions and handles the fund administration, while the Limited Partners may contribute capital and own a stake in the fund. Limited Partners do not need to be involved in the ongoing operation of the fund, but are able to benefit from any profits made.Private partnerships like Hedgeable's are excluded from the definition of an investment company, and are not registered under the U.S. Investment Company Act of 1940. Instead, these partnerships fall under the U.S. Securities Act of 1933. According to this law, Hedgeable can offer its fund to accredited investors as long as they meet the standards that were described prior. Under Section 3(c)(1) of the Investment Company Act of 1940, partnerships like Hedgeable’s are compliant as long as no more than 99 individuals own it. Because of these restrictions, each Hedgeable fund is limited to accredited investors, and only 99 investors can allocate capital to each fund. When the 99 accredited investor limit is breached, Hedgeable opens a new fund.As of the time of this writing, we do not believe there is a sufficient number of quality offerings on the market that meet the criteria for non-accredited investors under Title III of the JOBS Act of 2012. We will continue to explore if, and how, we will offer venture capital to our non-accredited clients via the new Title III provisions. As a fiduciary, it is our duty to take a cautious approach to new regulation, as effects are typically not seen in markets for years after implementation.Fund Costs & TaxesAs part of our overall mission to democratize the investment process, we provide venture capital investing to our clients with no additional fee. That means the Hedgeable venture funds do not charge any management fee or performance fee, and any administrative costs are covered by Hedgeable. Any member of the Hedgeable platform that meets the regulatory requirements is eligible to invest in our venture capital offering with no added cost. Hedgeable charges one fee for all platform features, based on the total assets under management for each client.Similar to publicly-traded ETF portfolios, some of the investments in venture capital funds that Hedgeable makes may have costs associated with them. However, Hedgeable's fund does not charge a fee for its services.Funds will be administered by Assure Services in Utah. The administrator is responsible for issuing an annual Schedule K-1 to all investors in the funds. All clients will be responsible for filing their own taxes. Hedgeable will not file or handle tax documents for any Limited Partners.Fund Performance BenchmarkingPerformance will be shown on the Hedgeable platform as data becomes available, utilizing updates provided by the index funds or individual companies and following standard mark-to-market practices.The benchmark that Hedgeable uses for the Hedgeable Venture Funds is the iShares Micro-Cap Index. This index tracks publicly-traded securities in the bottom tier of the Russell 2000 Index, with market capitalizations generally below $1 billion. This is a serviceable proxy, as the majority of Hedgeable’s venture capital investments are made in firms valued below $1 billion.Fund Liquidity & TimingCurrently, there is no secondary market for shares in any Hedgeable venture fund. Therefore, commitments cannot be redeemed until a fund liquidates, which is estimated to occur 7-10 years after investments are made. Investors should be comfortable with this lockup period before committing assets, and must qualify as accredited investors to be eligible. Ongoing distributions may be made to fund investors if an underlying company has an exit or another liquidity event occurs over the course of the fund.Hedgeable intends to launch at least one venture fund each year, closing on or before December 31st of the calendar year, or when 99 accredited investors have successfully committed to a fund (whichever happens first). The graphic below shows projected timeframes for Hedgeable fund investments:As shown above, there will be some overlap across funds, as investments for each will be spread over a period of roughly two years. For clients seeking greater vintage diversification, an investment in multiple Hedgeable funds is possible.Fund AllocationsWhen clients hire Hedgeable as their investment advisor, we use proprietary data science to construct customized portfolios, in line with their long-term goals and objectives. We target a 0%-5% recommended allocation of a client's overall portfolio to venture capital. The precise amount is tied to a client's overall profile and goals. Our proprietary algorithms analyze the risk appetite and liquidity tolerance of each client, both of which are instrumental factors in determining a recommended venture capital allocation.The chart below demonstrates what a typical portfolio might look like, including Hedgeable's recommended venture capital allocation:Hedgeable Venture Capital MethodologyIn this section, we will go over the methodology that underlies Hedgeable's venture capital investing. Our venture capital exposure mirrors the core-satellite approach we utilize for clients' broader stock and ETF portfolios.Core InvestmentsAt least 65% of the venture capital exposure is invested in index fund offerings from leading venture platforms such as AngelList (company), CircleUp, and OurCrowd. These investments will form the “core” portion of the venture portfolio. The index funds provide exposure to a wide array of consumer technology, enterprise technology, food & beverage, retail, and healthcare companies.The core exposure aims to have diversification across both sectors and geographies. For example, with core public equity exposure, most clients are invested in the U.S. stock market, international developed markets, and emerging markets. Each of these investments may be represented by an ETF that has exposure to hundreds of underlying companies from all sectors of the market.Hedgeable venture capital portfolios make investments in approximately five index funds, each of which invests in an estimated 25-100 underlying startup companies. We consider a diverse range of platforms through which we can obtain the core exposure, including but not limited to CircleUp, AngelList, and OurCrowd. CircleUp is a platform focused on the consumer and retail startups, while AngelList focuses on high-growth companies in the consumer technology and enterprise technology spaces. To increase geographical diversification, we also leverage high quality platforms like OurCrowd that invest in Israel and across Asia.Why Crowdfunding Platforms?Hedgeable leverages equity crowdfunding platforms for core investments because of the vast array of investment opportunities they offer.Equity crowdfunding is a new way for companies to raise capital that started in the wake of the 2008 financial crisis. As credit markets tightened, less capital was available from banks and other traditional sources. This coincided with an explosion in the use of social networks like Facebook. When you combine the social power of the crowd with the demand for capital, you end up with the emergence of crowdfunding platforms.Some of the earliest crowdfunding platforms were Kickstarter or Indiegogo. Investors who fund projects on these platforms can contribute capital to something they want to support, but they do not receive an equity stake in the project or company. A new batch of crowdfunding platforms sprouted up in 2009-2011 to solve this problem, including AngelList, CircleUp, and OurCrowd.These equity crowdfunding platforms offer a great way to see which companies are raising money in the first place. For example, in 2010, a little known company called UberCab listed itself on AngelList and gathered an impressive $1.25 million in capital from the crowd. Little did anyone know, just five years later, UberCab would be the $60 billion phenom that we now know as Uber (company)! Equity crowdfunding played a role in making Uber what it is today.Companies listed on equity crowdfunding platforms often have large institutional investors backing them as well, or have been incubated by top accelerators like Y Combinator. Not only do equity crowdfunding platforms provide great marketing tools to learn about new companies, but they also serve as a filter for the hundreds of thousands of companies that start every year.A Venture Capital ETFIn our core stock and ETF portfolios, we typically allocate to ETFs like the Vanguard Total Stock Market Index (VTI) for U.S. exposure or the iShares MSCI EAFE Index (EFA) for international exposure. Using these two investments as an example, investors get exposure to over 4,000 underlying companies. Since these ETFs are weighted by market capitalization, they include exposure to small-cap companies across the world.Remember the iShares Micro-Cap Index that we use as a benchmarking for venture capital? The challenge for investors is getting access to small, upstart companies before they reach the public markets. Our venture index fund methodology acts as a proxy for the performance of micro-cap stocks before they reach IPO status. We look to diversify the core venture index exposure in the same way that we would the core public index exposure in the rest of your portfolio, by considering both sector and geographic diversification. So, while no such publicly-traded security exists, Hedgeable's venture capital exposure serves as a Venture Capital ETF proxy with its hundreds of underlying investments.Satellite InvestmentsOutside of the core index piece, the Hedgeable venture funds also make "satellite" investments into individual companies. Up to 35% of a fund's capital may be used for the satellite portion, with a target of 15-35 companies across different areas of the market. Satellite investments in individual companies mirror the satellite allocations we make to individual stocks for clients' publicly-traded portfolios.Satellite investing increases diversification in the funds by boosting exposure to lower correlation sub-sectors. By separating out some of the sectors within the index, we can also overweight the most attractive sectors given the vintage year. To understand this concept, consider the following data from Cambridge Associates:The return dispersion in the chart above is striking. Earlier, we noted that venture capital, as a whole, produced a 14.6% annualized return from 1984-2014. Yet, some sectors deviate substantially from that overall movement and provide much higher returns. The primary goal of satellite investing is to best isolate those sectors, providing increased diversification and also greater opportunity for return.Lead Investing vs. Follow-On InvestingWhen startups raise capital after a friends and family round, they typically have what is called a lead investor for a funding round. The lead investor sets the terms (provided in a term sheet), including the pre-investment valuation of the company, the percentage of equity being offered, and the board seats offered. The lead investor, in turn, can bring other investors into the round at the same set terms. A lead investor can also act as a cheerleader for the company, helping and guiding founders through the fundraising process. The lead investor is generally the largest shareholder in the round and is typically granted a seat on the company's board.Hedgeable does not act as the lead investor for any satellite investments. Instead, we participate as a follow-on investor. This means we only get involved in a deal once terms are set by a lead investor. The Hedgeable venture funds will always represent a small portion of any fundraising round and any investment will result in a minor economic stake in the company.Deal SourcingHedgeable finds individual deals for satellite investments in one of two primary ways: (1) by utilizing syndicates, or (2) by sourcing deals directly.SyndicatesOne way to get deal flow for satellite investments is through a syndicate, including those listed on the AngelList platform. In a syndicate, a lead individual or firm will bring forward deals to the syndicate backers. The backers rely on the lead’s connections or deep knowledge of the industry to gain access to quality investing opportunities. Due to the lead’s track record, syndicate backers will pay the lead of the syndicate a percentage of the profits, known as a carry, and in some cases, a management fee on the asset invested via the syndicate. Investments made using AngelList are currently only subject to carry and operational costs, and are not charged an annual management fee.The backers of a syndicate reserve the right to not participate in any of the deals sourced by the lead. Participating in syndicates not only allows Hedgeable to make very specific and themed investments, but also enables us to leverage the insight of the lead, which is typically an established venture fund or investor with a proven track record and deep domain expertise in the syndicate's focus area.Direct InvestmentOutside of deals that are syndicating by leading VC firms, Hedgeable may opportunistically invest in individual deals outside of any online platforms. These opportunities may come from connections of the Hedgeable management team, referrals from knowledgeable individuals in the startup space, attendance at incubator demo days from Y Combinator, TechStars, and other leading programs, or events hosted by Hedgeable to incubate companies internally.Categorizing DealsWe divide our potential investment universe into 16 distinct sectors:Artificial IntelligenceBiotechnologyBlockchain TechnologyUnmanned Aerial Vehicles and DronesFinancial TechnologyAlternative EnergyHealthcare TechnologyInternet of Things (IoT)MarketplacesMediaRestaurantsRoboticsSoftware-as-a-ServiceCollaborative Consumption (Sharing Economy)Virtual Reality (VR) & Artificial RealityWearable TechnologyEach sector is described below:Artificial Intelligence (AI) - Artificial Intelligence involves the creation of machines that are capable of replicating human cognitive functions like speech recognition, learning, planning, and problem solving. According to reports published by Markets and Markets, the AI market will grow at a 53.65% Compound Annual Growth Rate (CAGR) to $5.05 billion by 2020.Biotechnology - Biotechnology companies develop drugs and conduct clinical research aimed at treating diseases and medical conditions by using live organisms or their products, such as bacteria or enzymes. Hexa Research expects the biotech market to grow at a 12.3% CAGR through 2020.Blockchain - Blockchains are distributed databases that record and maintain data, without the potential for tampering or revision. This new form of technology became popularized with the advent of bitcoin, and many platforms have emerged since. One example of blockchain technology is Ethereum, which is a platform for the development and distribution of business applications on the blockchain. According to Aite Group, blockchain spending by banks & other players in capital markets is set to grow at a 52% CAGR through 2019.Drones - The drone sector builds hardware and software for unmanned aerial vehicles for consumer, commercial, or military purposes. TechSci forecasts the commercial drone market will grow at a CAGR of 27% through 2021.FinTech - FinTech companies operate in traditional finance industries by utilizing technology to improve data collection and dissemination. According to Research and Markets, the FinTech sector is expected to grow at a 54.83% CAGR from 2016-2020.Green Energy - Green startups attempt to more efficiently utilize existing energy consumption and production, or focus on developing new ways to generate energy while minimizing environmental harm. BCC Research forecasts that the green energy market will grow by an 8% CAGR through 2019.HealthTech - HealthTech companies use mobile apps, cloud storage, and other information technology to collect, store, and evaluate health data. These companies have goals of preventing, diagnosing, and treating diseases, improving rehabilitation, or improving long-term care. According to Statista, the HealthTech market will grow at a 36% CAGR until 2020 when it will reach a total addressable market of $223 billion.Internet of Things (IoT) - The Internet of Things is a network of electronic devices that collects and exchanges data without human involvement. According to IDC, the IoT market will grow at a 17% CAGR, to nearly $1.3 trillion by 2019.Marketplaces - Online marketplaces bring together and process transactions between buyers and sellers who are looking to exchange value in the form of a product or a service. Marketplaces can be B2B or B2C, and generally seek to improve availability, pricing, and/or liquidity for a given market. Forrester expects marketplace sales in the US to grow at a 10% CAGR from 2015-2019, hitting $480 billion by 2019.Media - Digital media is the distribution of entertainment and informational content using the web and mobile platforms over traditional distribution sources such as television and newspapers. PwC expects the sector to grow at a 5.9% CAGR through 2019.Restaurants - Venture investing in the restaurant sector typically focuses on funding companies that target an underserved segment of the market, those with proven concepts looking to expand into new markets, or capitalizing on new dietary habits or eating trends. For example, Infiniti Research forecasts that fast casual restaurants will grow at a 6% CAGR until 2019.Robotics - The robotics industry designs, manufactures, and operates machines that assist or replace humans in the workplace. According to Boston Consulting Group, the robotics industry could grow 10.4% annually and reach $66.9 billion in revenue by 2025.Software as a Service (SaaS) - SaaS companies create software that is distributed over the internet using a third-party provider, removing the need for customers to install and run applications on their own computers or in their own data centers. IDC forecasts the SaaS market will grow past $112.8 billion in revenue by 2019 at an 18.3% CAGR.Sharing Economy - The sharing economy connects people with spare capital or resources with those who need it. The two biggest players in the sharing economy are currently Uber and AirBnB. According to PwC, the sharing economy is expected to grow at a 29.5% CAGR to reach $335 billion in revenue by 2025.Virtual Reality (VR) & Augmented Reality (AR) - Virtual reality technology creates holistic interactive environments for users, in which senses are stimulated as they would be in the physical world. Augmented reality technology creates interactive environments that are not holistic, but instead are overlaid on a user's physical surroundings. According to ABI research, VR and AR technology is expected to grow 78% annually from 2015 to 2020, reaching a total addressable market of $100 billion.Wearables - Wearables are electronic devices that are worn on the body to track information and collect data. According to Markets and Markets, the wearable device market will grow to $8.36 billion in revenue by 2018, with a 17.7% CAGR.Sector SelectionFor satellite investing, our methodology involves targeting specific sectors. In order to assess the opportunity presented by a given sector, we analyze the growth potential and the risk profile of each. Growth factors are consolidated into a Sector Growth Score, risk factors are consolidated into a Sector Risk Score, and these two metrics contribute to an overall Sector Rating.Growth ScoreThe two key data points that influence the Sector Growth Score are growth rate and valuation. For growth rates, we utilize projected CAGRs (compound annual growth rates) from leading industry experts such as IDC, BCG, and PwC:To measure sector valuations, we consider known valuations from a sample of existing companies across each sector. For example, the following is valuation data for early stage companies that have raised money on AngelList:Sector Growth Scores are calculated as growth-to-valuation ratios. This is analogous to a PEG (Price to Earnings to Growth) ratio. PEG ratios are commonly used to measure the value offered by publicly-listed securities, considering a security's value in relation to its expected growth. A low PEG ratio indicates that a security may be undervalued. Hedgeable's Sector Growth Score is calculated in the reverse, measuring a sector's growth prospects adjusted for value. A high Sector Growth Score suggests a compelling case for future growth given a sector's current valuation level. The primary objective of the Sector Growth Score is to identify areas of the private market in which companies have ample room left to grow, which is a crucial barometer for early-stage investing.For the purposes of standardization, the ratio is interpolated onto a scale.Risk ScoreThe two key data points that affect the Sector Risk Score are burn rate and sector age. Both of these metrics can vary drastically across sectors.In order to incorporate these two very different measures into one score, we interpolate each on a standardized scale. Lower burn rates and longer sector histories lead to higher scaled values, as they indicate a more favorable risk profile. The numbers are then equally weighted to arrive at the Sector Risk Score, which is also standardized because it is derived from scaled values.Sector RatingThe Hedgeable Sector Rating is a weighted average of the Sector Growth Score and the Sector Risk Score. Considering the individual components of the Scores, it is calculated as:The variables w1 and w2 represent weights assigned to the Growth Score and the Risk Score, respectively, where w1 and w2 sum to one. These weights provide our model with flexibility to accommodate different market environments across fund vintages. At the end of an economic cycle, for example, growth prospects may play a slightly more important role than a sector's risk profile. In other economic environments, the two factors may contribute to the Sector Rating equally.For example, in 2015, the top sectors as measured by Hedgeable's Sector Rating were:Artificial Intelligence (AI)BiotechnologyBlockchainFinTechHealthTechRestaurantsRoboticsSharing EconomySoftware as a Service (SaaS)Virtual Reality (VR) & Augmented Reality (AR)Those sectors with high Sector Ratings are given top priority when evaluating satellite investment opportunities. Investments that do not fall into a sector with a high Rating are still considered on a case-by-case basis, dependent upon the individual security selection methodology outlined later in this paper.Interacting with the CoreOne additional layer of analysis when considering satellite investments is the relationship between satellite exposure and core exposure. Companies in sectors that are already well-represented in one or more of the core index funds are given lower priority, in order to optimize the core-satellite structure of the venture portfolio. Similarly, if there is a large amount of overlap between the market catalysts that drive a sector and the catalysts that drive part of the core exposure, said sector is also given lower priority as a satellite. For example, if a core portion of the venture portfolio has substantial exposure to investments that depend on the decline in traditional energy markets or the transition to clean energy, potential satellite investments in the Green Energy sector may be given lower priority than other investment opportunities, all else being equal.Security SelectionWhile identifying attractive sectors to target for satellite exposure is important, it is also imperative that individual companies be analyzed thoroughly. We use a proprietary two-tiered framework to assess a company's health and potential. This includes both a quantitative screen and a qualitative screen.Quantitative ScreenCompanies must pass our quantitative screen, which judges the competitiveness of the company in relation to its peers on factors like valuation, financials, and revenue growth. For earlier stage companies, product success - in the form of sales or customer growth rates - are weighted more heavily than the other measures.Qualitative ScreenAll companies are also subject to a qualitative screen, which judges the market potential of the business, the quality of the product or service, and the strength of the founding team. For earlier stage companies, the strength of the founding team and the potential for market disruption are most important.ConclusionVenture capital has long been the domain of the ultra-wealthy. Historically, allocation to this asset class has helped the wealthy to outpace their retail counterparts. With the advent of new technology platforms and more education, we believe this will change for the better. To that end, we are proud to offer a robust venture capital investing feature that curates a venture portfolio for our clients, with commitments as low as $1 and no added fees.Disclaimer: This is not a solicitation to buy or sell securities or an offer of personal financial advice or legal advice. Past performance is not indicative of future performance. It is suggested you seek out the help of a financial professional before making any investing or personal financial management decision.

I am sure you are not looking for word-to-work explanation of the term. But I am assuming you are seeking more insight about why is that a different tax-code or why is that a trend on rise.“Self Employed” is a term used to define certain kind of income class by IRS tax filing. The individual who is “self Employed” does not get salary from other business. He is also not have any tax withholdings from any of his clients. But this individual gets money for his services. This individual has to pay the taxes himself and take care of his/her benefits. Consider “Self Employed” as a small business with only one employee.There are millions of “Self Employed” individuals in United States — they are also called 1099ers, moon-lighters, contractors, solo-ists and freelancers. According to Daniel Pink’s “Free Agent Nation” (published in 2001) there were 33 Millions of self employed individuals in 2001. Every 2 person out of 3 in California was “Self Employed”. The prediction is that this number has grown significantly.Who are “Self Employed”Self employed receive 1099 form from their clients, as employees receive W-2s from the employers. 1099 includes the whole money based on the service agreement, without deducting anything for benefits or withholdings for the taxes. Generally, people on 1099 are risk takes so that gets factored in their hourly wages as risk premium. 1099 money is often much more than what people earn in terms of W2. So what are these types of people? —Moon-lighters: those who have a fixed job, but also do their own business on the side. Usually they collect W2 from their employer and multiple 1099 from their other clients.Contractors: These individuals work 100% of their time on a single project. Once the project is completed they look for other projects. Their 1099 compensation is typically based on their hourly rate. This rate is much higher than the salaried hourly comp due to the risk premium.Entrepreneurs/Small Business: There are many who work as a small businesses - maintain their clientele, customers and work schedule. Many in the current gig economy where they can work from anywhere, and hire individuals from any part of the world, fall in this category.Why do people become “Self Employed” —This is actually the ultimate goal for majority of professionals to be their own boss and work in they own terms. This brings higher satisfaction, gives freedom to work from anywhere, anytime and allows people to look for more than a ‘typical’ job may allow.At certain level in individual career, they realize that their growth (financial and intellectual) is much more if they do it all by themselves. They are the the peak of their performance and skills and know to do their own marketing & sales.Individuals under “Self Employed” status makes more money — at least they bring in more cash home and decide how much to keep in pocket, how much to deploy in investment and how much to give out to uncle Sam.According to a research (need to find the reference) individuals make 30% more as self-employees compared to employees.Self-employed have better means to plan for the retirement. Like 401K, Self-employed can sideline much more tax deffered money for their retirement. SEP-IRA helps individuals set aside up to 50,000 each years against 18,000 for the 401K. So, you can assume that self-employed retire early or retire much wealthy.Self employed have many more means to control their taxes. They have means to take much more deductions, use the tax-differed saving options and reinvest their money to avoid heavy taxation. As an employee, you have none.As a self-employees, you are building your brand and equity into your company. As you stand your life working, you accumulate intellectual properties, portfolio of clients, and tangible assets that are valuable. So when a self-employed retires they have a means to sell off their business to someone for market price and bag the additional money for retirement. An employee can only withdraw 401K, or pensions if that is provided.The other reason is shift in work culture — self-employed has become cool norm because theirs no loyalty with in employee-company relationships. Companies hire and fires individuals based on needs. Most of those employees who can stay in the company are either core and extremely smart individuals to survive. But generally the growth of employees in USA has been stagnant for ages.What are the risksThere are many school of thoughts — the one self-employed believes is that the bigger risk is not-doing-anything, or working for others. Many who are stuck in the organizations can’t be self-employed because it requires higher level of confidence, smartness and ability to do everything from sales, to actual work, to accounting, etc. Here’s few of them as risks —You are the business, you ought to do and figure out everything.You have to maintain critical skills that are essential to keeping up with the needs of your services. So this put you always on the fast tract for learningYou have to constantly look for newer opportunities. Because nothing is permanent for self-employed. (Nothing is permeant for employees either but that is the misguided notions some lead their life with.)You are often juggling more projects, challenges and opportunities. As much as time management is important it is also given that self-employed have a higher aptitude to do multiplexing.AdvantagesI am strictly going to talk about self-employed in the context of information/technology services. I have witnessed following benefits —Working at your own term, timeframes and freedom.Making more money. Keep more money.Taking off more. Pursuing other interests other than work more.Better/higher living standards — you can drive better cars, take exotic trips and live in better places and chances are that may be ok as business expense or tax deductions by carefully following the tax codes.Constant learning and development.Opportunity, opportunity, opportunity! As a self employed, you can do as much business as you want which translate to making as much money as you can. You can not at the mercy of your employers.How should I do itAnd one who is thinking about doing it, should consider few things —Your profile and salesmanship — Many people have the stigma to do the self-promotion. Many have ego-issue to approach their network and ask for ‘work’ opportunity. The good news to boost your confidence is — no one is born sales man. You may be socially shy, buy you can learn the trickDefine your services — you need to be at the time and place where your skills and competencies are in demand. Figure that out and gain confidence.Benefits — if your spouse is employed you have the healthcare, which is most important. Otherwise, you must consider how will you pay for it.Find clients — while you are in a job (and rotting) this is the time to meet people over lunch and coffee and ask them for connections or side work opportunity. See if you can land something while at the work. If it is not permanent (as is small) see if you can do it on the side. Wetting your feet and gaining some experience will be key.Find Partners/Mentors — it is said that any adventure by all your own can become challenging and lonely affair. If you can find someone who has done it, is doing it and can give you shoulder, go beg, borrow and plead or his/her company.All the best.Ketaki Cheema Sud

Top 10 Best Strategies for Business Success1. Planning, Planning, Planning“You need a destination and you need a map to get there.” That is the role of a business plan, explains Bob Wilson, co-principal of Stoney-Wilson Business Consulting, which specializes in helping small and medium-sized companies with their banking needs. Key to the exercise is an honest SWOT analysis — strengths, weaknesses, opportunities and threats. Wilson notes that other people will want to see the plan — such as lenders, insurance companies, bonding companies — but emphasizes, “The primary reason you’re writing it is for you; it will be your bible on how to get where you want to be.”A business plan helps the business owner to think through issues and understand problems. It’s the shorter-term plan — 12 months — as compared to the longer-term strategy plan. The shorter term enables greater accuracy in completing the action steps to achieve the key initiatives, Wilson explains. The company’s co-principal Julie Stoney recommends the plan focus on only three to five key initiatives, as each initiative will require several steps. Among the steps for “growing the business,” for instance, may be acquiring a complementary business, developing new product lines and franchising.Knowing the competition is an important component of a business plan. “In order to compete, you must understand what the competition is doing, such as pricing and service levels,” Stoney says. “It will also help you identify if there is something complementary that your business should be doing. You can identify holes in your own organization or in the industry you can address, and satisfy a need.”Also helpful to a business owner is an advisory board. “With an advisory board, the business owner surrounds himself with expertise in a lot of areas, and it becomes his touchstone on a go-forward basis,” Stoney says, noting that many business owners have no one to turn to. “An advisory board also increases accountability to the business plan — what’s been said, what’s been done, new steps.”2. Funding a Successful BusinessAdequate and appropriate funding is an ongoing necessity for a healthy business. “With a growing company, it’s always a matter of ‘when,’ not ‘if,’” notes Jerry Mills, founder and CEO of B2B CFO, which provides financial and strategic solutions to small and mid-market companies. In addition to planned growth strategies, he refers to such things as a Department of Labor audit, Environmental Protection Agency regulations and significant increases on healthcare or liability premiums as he points out, “There’s always some surprise out there that we don’t know will happen.”For this reason, he advises business owners to develop a relationship with their bank before the need for a loan arises. Observing that it’s typical to rush to the bank with an urgent need in an emergency, he says banks “don’t work well in that situation,” and cites the Dodd-Frank Act and other regulations since 2008 that banks must follow and that make lending more difficult for them.Recommending community banks as easier to work with than national ones, Mills suggests seeking a loan or a credit card when the business does not need it, and using it just to develop credit and a personal relationship with the bank. This is a strategy he recently followed for his own company. “My company has no debt, but there are things we will want to do in the future. I asked for a credit card and got one within 20 minutes. We’ll buy things with it and pay the charges when they’re due.” Having established credit with the bank is handy when the business needs money that might be harder to get, such as working capital. “It makes it easier for the banker to say, ‘Yes.’ When he goes to the loan committee, he can say he’s known you for a long time, and you’ve always over-performed.”3. Branding, Marketing & ImageBranding and marketing is an essential part of business, says Beau Lane, CEO of full-service strategic marketing agency LaneTerralever. “It’s how the world views you; it’s their emotional connection to what you’re selling.” In today’s always-on and connected world, there are more channels to reach people, but Lane notes the essentials are still in good communication. “Take the time to understand your customer and consider how your customer reacts to what you’re saying.” It’s best to be simple, direct and defined in terms of what is being communicated. In spite of short attention spans, smaller screens and limited time, Lane says, “What’s exciting and challenging in today’s world is, there are more ways to have that interaction with the customer.” Plus, the digital world enables businesses to track results and see customers’ behavior and how they are reacting.But before anything else, Lane emphasizes the importance of strategy as a foundation for any marketing effort. “It’s easy to create marketing materials, but the magic comes if you have strong strategy behind that, that’s focused on objectives you have and targeted to customers you’re trying to attract.”Social media can be a tremendous asset to any business by building a network of followers, friends and supporters it can count on, but, Lane cautions, there must be value provided in the relationship. “It’s successful if you’re contributing to a dialog or adding value to what you’re offering in the marketplace, but it can be harmful if your content has no value.” And while it can foster and continue a relationship, it is no substitute “for two people looking each other in the eyes,” Lane says. Describing business as a “contact sport,” he says relationships and trust are necessities — and they are best built face to face with people.4. Sales to Drive RevenueA new technology or “best” of a product or service may be the foundation for establishing a business, but when the market gets competitive or the business hits a plateau, the predictability of cash flow becomes unpredictable. Sales is the side of being in business that provides predictable revenue growth, but sales trainer Mike Toney, founder and CEO of Conquest Training Systems, notes there are three methodologies: transactional, focused only on a quick sale and closing the deal; trusted advisor, working with a customer on a problem the customer recognized; and strategic partner, bringing a solution to a problem the customer had not known he had.Toney shares six important aspects of sales. These are “Society” — knowing who is being targeted and who is the ideal client; “Silo” — identifying the niche(s) the business can dominate; “Solution” — recognizing the problems the business can solve that no other businesses can solve; “Strategy” — developing a plan; “Structure” — accountability, management and compensation of the sales force; and “Systems” — the methodology that the business deploys.A common problem, according to Toney, is having the wrong type of salesperson for the desired role, such as a transactional sales representative in a strategic role. Noting that most salespeople will show up to “sell” themselves to fill the job, Toney observes, “Most owners don’t know how to hire.” It’s important to not have a “softball interview” but to put pressure on the applicants so that they can’t stay in their safe mode. The owner can learn more about the salesperson by seeing where he or she “cracks.”But even before that, the owner must be able to articulate exactly why his company exists; for instance, whether its strategic purpose is the solve a problem or to move product.5. Managing People, Process & BenefitsWhat makes a business successful, says Stephanie Waldrop, principal of Employee Benefits International, “has a lot to do with its ability to attract and retain quality employees who will be the face of the business.” A benefits program as part of a company’s compensation package is a tool to build loyalty within an employee pool. “It shows how much an employer cares about them. And employers who care get employees who care.”A lot of attention has been focused lately on healthcare, as discussed in the three-part healthcare series that concludes in this issue. But specific benefits aside, Waldrop states, “The No. 1 thing employees want in a benefits program is stability.” It’s important for employers to have a strategy to create that stability, from managing cost to creating a three- to five-year plan of what they want the program to look like. “This allows them to avoid a knee-jerk reaction, such as slicing benefits to offset a renewal increase.”An employer can achieve a win-win by surveying the employees as to what’s most meaningful to them — but limit the choices to items the employer has already determined are within his budget and he’s willing to act on.Also, there are benefits an employer can offer at no cost to the business, sponsoring them but making them available on a voluntary basis. Items such as life insurance and income protection may be available only in an employer setting, or be richer than what is available outside of that setting, Waldrop explains. “[Providers} assume higher participation rates because it’s a group setting and done through a payroll deduction.”There are other elements of company culture not tied to benefits, Waldrop points out. Among them is arming employees with training so they’re empowered in the position they’re charged with. “Employees feel better about what they do if they’re properly trained and empowered in that role.”Another plus is making employees feel a part of the company’s success, such as offering profit sharing or bonuses based on hitting the company’s revenue and retention goals. These can be structured to fit within the employer’s budget and proportionate to the individual’s pay level. Says Waldrop, “The motivation to find the ‘yes’ answers and ‘can-do’ responses for clients will make all the difference in the long run.”6. Operations & Accounting“Accounting is important when you’re starting a business. You’ve got to know what you’re getting yourself into, and numbers can help you figure out if it will be overwhelming, if you can handle it, if you need help,” says Chuck McLane, lead managing director at accounting firm CBIZ.Focusing on addressing the tax side of accounting, CBIZ managing director Zandra O’Keefe shares, “Financial statements show the health of the business. They are the basis of tax planning and tax prep.” Planning encompasses building wealth, paying taxes, providing benefits to employees, and compliance measures — and compliance, she notes, is an area that is always evolving, which is why she emphasizes the importance of having competent people in-house to help the business stay on top of compliance measures as well as to be able to “follow the cash.”“Make sure you understand the ins and outs of cash and the timing of that. That’s crucial,” says McLane. Creating a model of the cash flow enables a business to get a better sense of the timing of inflows and outflows, so that when money comes in, the business owner does not distribute too much too early and then not have enough when debt repayment comes due or for deductions for fixed income, or payroll or sales tax, or other obligations. In a nutshell, “Income does not mean cash, and vice versa,” O’Keefe says.Dealing with customer debt is another issue. How risky is the client? Should the business collect a retainer up-front? “It’s important to understand the norms of the industry,” McLane says, noting this, too, will help the businessperson understand the broader picture of what the business’s cash requirements will be over time.There are also a few specific tips O’Keefe and McLane feel are important to share. “Get an EIN (Employer Identification Number) instead of using a Social Security Number, because of the threat of identity theft. When you give 1099s to vendors at the end of the year, use your EIN and business name,” O’Keefe says.“Keep your business account separate from your personal account. A lot of small businesses start with the personal credit of the owner to give the starting point. But it’s important to have the discipline to separate the two, to keep track of the flow of funds — even if you have to do a transfer of funds from personal to business,” McLane says.“Talk with an attorney about the business structure that would be best, when you choose your type of business entity. There are compliance issues around fringe benefits and tax level. For instance, in a partnership, the partners do not get a W2, and they can’t participate in an employee cafeteria plan — in fact, if they do, it would become taxable for all the employees. Entity selection is critical,” O’Keefe says.“For financial reporting, establish good policies and procedures from the beginning. Have consistent policies and procedures in place, so that as you add people to the organization, you will continue to record transactions in the same consistent manner,” McLane says.7. Retaining Customers, Maintaining CommunicationCustomer service is the differentiator, says Tyler Wirtjes, GoDaddy vice president of customer care. “Whatever you build today, in 60 days 30 companies can copy that product. But they can’t duplicate the people — the interaction with your customers that you put in place to have that contact with your customer.”The No. 1 focus should be trying to build a relationship, not just complete a transaction, he says, adding, “I think that’s sometimes forgotten.” This may mean going a step beyond whatever prompted the initial contact. Using his company as the example, he says that, in solving a customer’s issue, the service consultants ask the customer what he’s trying to accomplish with his business, so as to understand how he’s relying on GoDaddy. “Find out why they’re using you,” he says. “Help them find whatever success you can in using your product or service. That’s when they get emotionally attached to your company.” This is important in proactive contact as well as in reactionary response to complaints.Wirtjes acknowledges that technology enables many functions to be automated, such as virtual assistants programmed to handle FAQs. “Artificial intelligence has come a long way over the last 10 years.” But what sets a business apart is delivering a personalized experience. For this reason, even a real person may not accomplish that relationship-building if the “conversations” are too rigidly scripted. “No one wants to call up and talk to a robot that’s actually a human but you think it’s a robot,” Wirtjes says.Thanks to social media, complaints and issues today travel fast. Ignoring them can hurt a business’s brand, but dealing with them can, potentially, promote it. Explains Wirtjes, “If you take care of them in the public forum, you can gain followers to your brand or service or product because of the way you engage with customers and the way you solve their problem.”8. Technology that Matters“Technology is important for its ability to help all businesses scale — to provide repeatable and consistent results with what they do for their customers,” says Clint Harder, chief technology officer and senior VP of product strategy at OneNeck IT Solutions. He also points to the advantage technology brings by enabling business owners and executives to connect directly with [all the people they do business with] — customers, partners, vendors.”Cloud outsourcing has become appropriate for businesses of all sizes, Harder observes, explaining that instead of a business consuming technology with its own capital and bringing it into its physical location, the cost is an operating expense remotely delivered.Under the broad umbrella of “technology” are items developed for specific types of businesses or industries, and the smaller companies that do not have a department dedicated to researching and updating advances that could be useful to them “get that type of advisory and forward-looking education from vendors they partner with for their IT,” Harder says. Professional services organizations, whose inventory is people and time, require a program to help manage labor costs and billing rates as well as needs around document management. Retail focuses more on business processes — inventory of merchandise, manufacturing cost, delivery systems to get goods to locations. And getting detail-specific within industry-specific, Harder notes that dealing with certain types of oil wells requires specific engineering technology software and hardware.“Technology” also encompasses the type of service OneNeck provides — helping run all the other technologies that support specific applications. The point is to protect and monetize the data. Says Harder, “Everything else can be bought in a commoditized component basis as an operating service, such as data co-location or cloud computing.”Noting that core company information technology becomes purely obsolete in five years, and has degraded capability — although is still functional — in just two to three years, Harder says, “Using the cloud puts the obsolescence risk on the provider rather than on yourself.”9. Personal Decisions, Actions & EnergyPeople who are successful are generally never satisfied with the status quo; they need to keep creating. But Patricia Noel Drain — speaker, author and business mentor — counsels, “Make sure you’re satisfying your needs when you’re leading the company. Forgetting about yourself and only taking care of others is not being a good leader.” She recommends, in fact, “Put yourself on your calendar.” And when pushing out of the comfort zone, the most important thing is to “stay true to you. Consider, ‘Does this feel good to me?’ If not, you’re going down the wrong path.” To grow their business, she’s found that people have to be happy in it.The oft-quoted advice is “Work on your business, not in it.” Creating systems for all aspects of the business operation enables the business owner to delegate responsibility, and Drain notes that creating systems is what creates the value in the company. “Determine where you build the systems based on your own passion. This elevates you to still be the visionary for the company.”Of course, recruiting, motivating and retaining great employees is important. Drain underscores a difference between great and mediocre as she articulates, “Make sure you have systems in place to retain your really great employees.”And with the systems in place and great employees on board, Drain says, “If you want to take the business to the next level, you have to get out of your own way.”10. Mentoring & Community InvolvementVisibility and connections enhance the growth potential of a business. Community involvement provides opportunity for a businessperson to benefit in both areas in addition to helping make a positive impact on the community he or she is part of. Christy Moore describes it as the “power of having deep relationships and connections with other community leaders, so they can leverage that connection to help with whatever they’re trying to achieve.” Moore, executive director of Valley Leadership, notes that mentoring is key as it brings together emerging and seasoned leaders. “It allows the mentor to leave a legacy behind and have a significant impact on an individual, and the mentee gains wisdom and insight from a seasoned professional.”The purpose of Valley Leadership’s program is to educate people about community issues; it is not a formal mentoring group. But mentoring and connections are a key focus and a significant reason to get involved. “We bring together diverse groups of individuals who may not otherwise meet or interact,” Moore says. Participants gain a better understanding of varied community and business sectors and different — even opposing — perspectives. Furthermore, project groups within each leadership class — who work together to accomplish a sustainable community project that fulfills an identified need — are purposely composed to comprise what the field of energetics calls a “full brain,” combining people whose strength is in social thinking, conceptual thinking, analytical thinking and structured thinking.