For many, the stroke of the New Year represents new beginnings, resolutions, and the motivation to make changes for the better. But weeks or months later, the motivation diminishes and many of us slide back to our comfort zone because emotional or physical road blocks get in our way. "If only I had more money. If only my spouse supported me. If only I had more time, more education, the kids were bigger, smaller......If only...."
Our Entrepreneur's Story this month is about an individual that broke through the "if only" syndrome by re-investing his 401K funds from a previous employer to start a new business. Instead of owning stocks or bonds in companies in which he has no control of the outcome, he now owns a proactive investment where he will be directly rewarded for his efforts.
Congratulations Gary and welcome to the world of entrepreneurship!
Gary Peterson
Gary Peterson was 60 years old and wanted to make a change in his career. He had spent 30 plus years working for a large food store chain, working his way up to Produce Manager and then Store Manager. After his company went through some major reorganization and store closings, Gary had to take a job with a smaller food chain at less money. He didn't like the culture of the new company and work wasn't fun anymore.
Gary liked to work, liked people and had no immediate plans to retire. When I first met Gary, he was already exploring franchising on his own. He was in conversations with a company called All Tune and Lube and was pretty sure he wanted to go with that company. I explained how I help aspiring entrepreneurs determine which business or franchise would be a good fit for them, and he was interested in learning more. . Even though he liked what he learned about All Tune so far, he was willing to keep an open mind and explore other possibilities just to make sure.
Gary knew little about automotive repair. He was a food guy. He knew about groceries, apples, oranges, pizzas, etc. He knew he wanted to be challenged, rewarded for his efforts and to have weekends off for a change. So we agreed to look at other franchise opportunities that met his goals and needs plus other auto repair franchises for comparison. Gary took our process seriously and did the necessary validation. In the end, he came back to All Tune and Lube. But this time, he was much more confident that this was a good fit for him.
But then the roadblocks started to appear. The franchise wanted him to find a suitable location before they award him a franchise. Plus, there was the obstacle of funding the business.
There were challenges finding a suitable location and negotiating a lease. The franchisor sent out a specialist twice to help Gary explore locations. Offers were made and offers were rejected until he finally found a suitable location. I introduced him to a business/franchise attorney that could help him with the franchise agreement and lease. But he still had to figure out how he was going to pay for this business.
Most of Gary's assets were tied up in his home, income property and his retirement account. He found that financing a new business is challenging these days. Banks have new stricter guidelines. Pulling equity out of his home isn't as easy as it used to be. Fortunately there is a program that more and more of our clients are utilizing to access their retirement funds without penalties or tax implications. The IRS doesn't publicize this program, nor will your stock broker promote it. There's nothing in it for him. What most people don't know is that the Employee Retirement Income Security Act of 1974 (ERISA) made it legal for you to reinvest your retirement funds in your own business. It's a turn-key program that lets you redirect the money in your retirement fund for a fresh start in a business, whether it's to purchase a franchise, buy an existing business or start your own entrepreneurial venture. In Gary's own words, "This program was a tremendous opportunity to use my tax deferred retirement funds to start my own business. I want to thank Marty for turning me on to this program. If it were not for this program, I doubt if I would be in business today."
This program is not right for everyone and one must proceed with caution. There are pros and cons and it is a decision that should not be taken lightly. Do not attempt to do this on your own. There are lots of rules that must be followed to the letter to make this IRS compliant. One wrong move and you'll be penalized. Fortunately, there are several companies that specialize in this conversion so you can put your funds to use without withdrawals or distributions. They walk you through the process making it relatively easy to access your funds in about two weeks. You will even receive a favorable Letter of Determination directly from the IRS.
I suggested a couple of the companies that specialize in this procedure to Gary. After his due diligence, he decided that this program was the best way to fund his new business. It was an investment of this funds and not a loan. That meant that there would be no loan payments to make thus creating a better cash flow in the start up stage of his new auto repair business.
It's now a couple of years later and Gary has ramped up his business nicely and is now well known in his local community. He does a lot of networking with Chamber and Networking groups that result in new customers. Gary's friendly and customer service nature insures that these customers become repeat customers and also future referral sources. Time and time again I've heard testimonials about his great service and making the repair right the first time. He has a play area for kids and an office area for adults offering free WiFi hookup making waiting for your car a pleasure.
All Tune and Lube is a full service automotive repair facility with services from engine replacement to oil changes. Tune-ups, batteries, exhausts systems are just a few of the many services he offers. If your vehicle is in need of repair or maintenance, stop by All Tune and Lube located at 6607 W. Mitchell Street, West Allis, WI., just behind the Farmer's Market. Hours are M-F - 8-6 and Saturdays 80in Call 414-327-7881 for an appointment. Gary offers pick-up and delivery and shuttle service in the West Allis area. You can certainly trust Gary to take care of your vehicle and look out for your pocket book at the same time.
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What is your New Year's resolution for 2010? Do you have a list of "if onlys" that have been holding your back? Is business ownership your dream?
Let's make 2010 the year that you explore your options, break through those road blocks that have been holding you back and go on to achieve the life of your dreams. I am here to help you with your journey. It starts with a phone call.
If you'd like addition information on how to use your retirement funds to start your business, give me a call and I'll hook you up with the experts. They will be happy to explain the process so that you can make an informed decision.
Wishing you and your family a happy, healthy, joyous and prosperous New Year! Dreams do come true when you take the proper steps.
Best wishes for a spectacular 2010!
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