Category Archives: Entrepreneur

5 growth stage slipups that can kill your business

Originally published on the SCORE website.  Reeve Conover has been helping business owners start and grow their businesses as a volunteer SCORE mentor for more than 5 years:


“Many entrepreneurs have the guts to take that dramatic first step of sparking something into creation,” says Nelson. “But too many lack the perspective to reflect on what’s needed for the next step.”

And there simply are no required tests or qualifications to become an entrepreneur. Anyone can attempt it. That’s different from what Nelson experienced in the Navy where he served as a nuclear submarine office and had to prove his qualifications before advancing.

Because entrepreneurs often lack the skills to take their companies to the next level, they end up making mistakes that can quickly put those businesses at risk. Here are five such mistakes identified by Nelson, author of a new book called “The Second Decision – The Qualified Entrepreneur.”

Help1. Insisting on autonomy. One trait many entrepreneurs share is a desire for autonomy. That’s often why they became entrepreneurs in the first place. And that’s great starting out, because in the startup stage, the business is often all about you. Your fingerprints are on everything and there’s little you don’t know and aren’t directing.

But in the growth stage things become more complex. The business becomes more vulnerable to industry and economic trends. At that point, an entrepreneur’s insistence on autonomy can hurt the company’s ability to respond quickly and intelligently to challenges.

2. Unwillingness to build structure, cultivate expertise or delegate. As a business grows, many smart entrepreneurs surround themselves with a strong executive team – or at least a steady right-hand individual – to help ensure the company’s success, says Nelson. But too many business owners fail to create the kind of structure that produces good leadership decisions within a management team. As you grow your business, you must also build in accountability.

3. Lack of financial leadership. Many business owners simply are not strong on financial skills. This includes such things as tracking cash levels and trends, financial covenants, metrics and expenses. As the business grows, these things become more time consuming and complex. The business may need a financial expert to ensure the business owners gets good financial advice and input to grow the organization.

The U.S. Small Business Administration estimates that 60 percent of businesses that fail owe their demise to a lack of cash. Says Nelson, “When it comes to financial leadership, it’s what entrepreneurs ‘don’t know that they don’t know’ that will multiply the risk that their business will ultimately fail.”

4. Failing to adjust to the day-to-day. For entrepreneurs – especially serial entrepreneurs – starting a business is exhilarating. That’s one reason they do it. By comparison, the reality of operating a growing business day-to-day can pale in comparison. A bored or disinterested founder can create big troubles for a growing business. A bored business owner might decide to start another business, or make abrupt changes to the current company to keep the level of excitement high.

“Entrepreneurs are to be celebrated for their desire to innovate. But when a serial entrepreneur habitually looks for new sandboxes to play in, what happens to the existing company often isn’t good,” says Nelson.

5. Failure to self-examine. Business owners are typically good at certain things. For example, some excel at salesmanship, others at marketing, and others at product development or perhaps customer service. But almost no entrepreneur is great at everything it takes to grow a successful business.

For that reason, entrepreneurs need to be aware of their own strengths and weaknesses – the same things they gauge in their employees. Set aside your abundant self-confidence and take stock of what you know, what you’re good at and what skills you still need to master.

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“Working too hard makes leading more difficult”

This is a great article by Ron Friedman, the author of the book “What go you here, won’t get you there.”  It discusses why certain behaviors that we generally view as productive actually hurt you at different stages.  He is now adding a fourth habit – Failing to Disconnect.  This has become a problem for all of us – and I am no exception.

If you are always reading emails, answering calls, and thinking about work – on the weekends…. read this!

“Medical and Dental Insurance – not ObamaCare”

I saw this sign, coming out of the Lowes the other day and it go me thinking – about all the things wrong with this simple sign.  On the surface it seems benign – This guy can get you coverage for medical insurance that is not ObamaCare.  However it really highlights one of the big problems with the current level of public knowledge.    Lets have a look:

1)  The sign implies that ObamaCare is a type of health insurance.  Now, many people believe this, and they are all misinformed.  “Obamacare” – AKA The Affordable Care Act – is simply a set of regulations.  It governs who can get insurance, when they can get it, sets minimum standards for that insurance coverage, and prescribes penalties for those that do not have coverage, or employers that fail to offer it.

2)  So what kind of coverage can this person get you, if its “not ObamaCare?”  It would have to be less than the Minimum Essential Benefit (MEB) level prescribed in the law.  That means two things – First, the coverage is not going to be very good or comprehensive.  Second, since it does not meet the MEB rules, you have now bought insurance that isn’t adequate AND you will still be fined for not having the MEB level of coverage.

3)  But wait, there’s more.  Most people who would be attracted to this sign will be interested because they cannot afford regular insurance.  It is unlikely that this person is going to tell them about the subsidies available in the Marketplace, or the expanded Medicaid coverage available in many states.  In fact, 87% of those that enrolled last year on the exchange were uninsured prior, and 70% of them are paying less than $100 a month for coverage (after the subsidy).

The sad truth is the law is complicated, so people are confused, and that is a breeding ground for shysters to take advantage of them.  There is no substitute for getting professional guidance.

2015 Pension Limits changed

The maximum deferral limit for 401(k), 403(b) and 457(b)plans increases $500 to $18,000

The Catchup goes to $6000 from $5500.

The definition of Highly Compensated Employee moves up to $120,000, and the maximum compensation line to $265,000.


7 new things you have to know…

Premium Changes-  According to a study by PriceWaterhouse Cooper, Premiums under the Affordable Care Act are expected to increase an average of 7.5% in 2015.  The largest increase is 36% in Nevada, and the biggest decrease is in Arizona (23%).  Premium increase for the large carriers (such as Blue Cross) are above 9%.

 COBRA and PPACA- There are some significant conflicts generated by these two laws.  For example, COBRA coverage applies retroactively, but PPACA coverage is prospective – either the first of this month or next month.   While both have a 60 day election period, COBRA begins from the day notice is received, so may actually provide a longer window.   A person electing COBRA gets to continue meeting their current deductible, while an exchange policy begins fresh right away.  And electing COBRA nullifies your rights to enroll on the exchange and to get a subsidy.

Uninsured now covered?  87% of those that enrolled on the exchange were previously uninsured, and 70% of those are paying under $100/month for insurance, accounting for their subsidies.    The states with the fewest uninsured are lead by Massachusetts (1.2%) who has had mandated coverage for years, and West Virginia showed the most improvement (11% more insured).  The worst states?  Texas (25%), Mississippi (21%, and actually got worse) and Louisiana (21%).

FINES-  If you make more than $250,000 and have a family of 5 that is uninsured, your fine?  A whopping $12,240.  Most Americans, of course, come nowhere near that number, and will be the greater of $95 or 1% of their income for being uninsued in 2014.  There is no penalty for those making less than 410,150.  The penalty is due when you file your 2014 tax return.

Rebating your premiums-  Insurers are required to return premiums to individuals and small businesses if they spend less than 80% on claims (85% for large group).  Rebates occurred in almost every state, with Blue Cross and Blue Shield of FLorida leading the pack, returning $10.1 million.  States with the largest refunds include New Hampshire, South Carolina, Indiana.

New Qualifying Events- if you have a pre-tax plan, your employees cannot simply disenroll during the year, except for certain situations.  2 more have been added- if your employee enrolls in the marketplace, and if they have a reduction in hours during the “stability period.”

Full Time Equivalent Calculation- This calculation now is determined over the prior year – if you have over 50 FTE’s during any consecutive 6 month period, you are subject to play or pay fines.

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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA. - SIPC - Brokercheck