MONEY Financial Planning

4 Things You Need to Change Your Career

Want to change your career or launch a new business? A financial planner explains the four things you need.

A few years ago a client, Peter, came to me and said, “I’m doing all the work, but my boss is making all the money. I could do this on my own, my way, and make a whole lot more.”

Peter was an instructor at an acting studio. He was working long hours for someone else, knew the business inside and out, and felt stuck. He wanted a change.

We talked through his dilemma. Peter wanted to know what he needed to do to venture out on his own and start his own acting academy.

Many of us find ourselves daydreaming about making such a bold life change, but few of us do it. So what is stopping us from taking the leap? Why don’t we have the courage to invest in ourselves?

Peter and his wife, Jeannie, sat down with me to chart out a plan. We determined that they needed four major boxes to be checked for Peter’s dream business to have a real shot at success:

  1. Support from the spouse
  2. Cash reserves
  3. A business plan
  4. Courage to take the leap

Let me break these down:

1. Support from the spouse: Peter and Jeannie had to be in full agreement that they were both ready to take on this new adventure together. In the beginning, they would have significant upfront investments in staffing, infrastructure, and signing a lease for the business. Money would be tight.

2. Cash reserves: Peter was concerned. “How much money can we free up for the startup costs?” he asked. We discussed the couple’s financial concerns, reviewed financial goals for their family, and acknowledged the trade-offs and sacrifices they would need to make. We determined a figure they were comfortable investing in their new business. Then we built a business plan around that number.

3. Business plan: It has been said that a goal without a plan is just a wish. Peter and Jeannie needed a written plan in place so that their wish could become a reality. Their business plan would serve as a step-by-step guide to building and growing the acting academy. It included projections for revenues, expenses, marketing strategies, and one-time costs.

Once we wrote the business plan, we had one final step remaining: the step that so many of us don’t have the courage to take. Peter and Jeannie had to trust in themselves, believe in their plan, and…

4. Take the Leap: Regardless of how confident we are, how prepared we feel, and how much support we have, this is a scary step. We have to walk away from our reliable paycheck, go down an unfamiliar road, and head out into the unknown.

I’m happy to share that Peter and Jeannie’s story is one of great success. They faced obstacles and bumps along the way, but Peter persevered and succeeded in accomplishing his goal. He is now running a thriving acting academy with multiple instructors and a growing staff. If you decide to invest in yourself, you will need to take the four steps too.

———-

Joe O’Boyle is a financial adviser with Voya Financial Advisors. Based in Beverly Hills, Calif., O’Boyle provides personalized, full service financial and retirement planning to individual and corporate clients. O’Boyle focuses on the entertainment, legal and medical industries, with a particular interest in educating Gen Xers and Millennials about the benefits of early retirement planning.

TIME Innovation

Five Best Ideas of the Day: March 12

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Protecting whistleblowers protects national security.

By Mike German at the Brennan Center for Justice

2. Could we treat pain by switching off the region of the brain controlling that feeling?

By the University of Oxford

3. Small businesses are booming in China, and it might save their economy.

By Steven Butler and Ben Halder in Ozy

4. Not so fast: Apps using Apple’s new health technology could require FDA approval. That doesn’t come quick.

By Jonathan M. Gitlin in Ars Technica

5. We might feel better about driving electric cars, but they’re still not good for the environment.

By Bobby Magill in Quartz

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Innovation

Five Best Ideas of the Day: March 11

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Special collaborative courts focus on rehabilitating troubled veterans. They’re working.

By Spencer Michels at PBS Newshour

2. PayPal runs a dead-simple microlending program that helps small businesses grow.

By Michelle Goodman in Entrepreneur

3. To make voters care, a radio station in L.A. picked a prototype non-voter and built their election coverage around him.

By Melody Kramer at Poynter.org

4. Can the mining industry become a responsible, reliable partner for local communities and the environment?

By Andrea Mustain in Kellogg Insight

5. Robert Mugabe is 91 years old. The world should prepare for a succession crisis in Zimbabwe.

By Helia Ighani at the Council on Foreign Relations

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Small Business

These Are the Best (and Worst) States for Business

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All of the 10 best states had unemployment rates below the national unemployment rate in 2013

While the United States was founded on the principle of equality for all people, the 50 states are decidedly unequal in providing opportunities for business. For companies choosing to locate in the United States, deciding the state in which to base their operations can be very difficult.

To determine America’s best states for business, 24/7 Wall St. identified nearly 50 measures that contribute to the business climate and reviewed them in each of the 50 states. The measures were classified into eight larger categories that independently measured various risks and benefits of doing business in each state. (Click here for a complete methodology.)

The health of a state’s economy, the result of a confluence of factors, is perhaps the most important consideration for businesses choosing a location. The growth of economic output in 2013 in seven of the 10 best states for business was greater than the national GDP growth rate of 1.8%.

Another indication of a healthy economy, the job market, was also strong in the 10 best states for business. All of the 10 states had unemployment rates below the national unemployment rate of 7.4% in 2013. Four of the worst states for business had unemployment rates that exceeded the national rate.

Click here for the best states for business

Click here for the worst states for business

However, while a state’s economy is tied to a host of factors, not all factors benefit businesses in the same way. The business climate in some states was more favorable to companies primarily concerned with minimizing the costs and risks of operating a business. These states, which include North Dakota, Wyoming, and Texas, tended to enjoy ample natural resources, low cost of living, and low regulation.

Some states benefit from a well-educated and highly skilled labor force. They are able to attract businesses that require these skills, such as professional and business services, health and education services, and information. In return, these businesses drive economic growth in these states through technology and innovation. These states include Massachusetts, Virginia, and Minnesota.

While it is emphasized more in some industries than in others, a low cost of doing business is a major reason to choose to operate in a particular state. The average cost of goods and services in six of the best states for business was lower than the national average. This was generally driven by beneficial tax climates, lower expenses from utilities and real estate, and lower average employee compensations.

Although the type and size of operating costs vary considerably between industries, wages are a major expense for many businesses. The average wage and salary in three of the 10 best states for business was roughly inline with the national average of $50,012 in 2013, while in five other states, average wages were below the national figure.

While lower wages lower the cost of doing business, they are also frequently tied to jobs with lower educational attainment. Among the five best states for business with lower than average wages, three had lower educational attainment rates than the national figure. In these states, including North Dakota and Wyoming, the prevalence of industries that require high-skilled labor was also relatively low.

Nevertheless, the percent of STEM jobs in a majority of the best states for business — jobs related to science, technology, engineering, or mathematics — was generally high. At least one in five of all jobs in eight of the 10 best states for business were STEM jobs. On the other hand, the percent of jobs in STEM fields was relatively low in the worst states for business.

In addition to a highly-educated labor force, access to capital can also drive innovation in a state. In 2013, 13.26 venture capital deals were made per 1 million Americans. In seven of the worst states for business, there were fewer than three such deals per 1 million residents. In the best states, on the other hand, investments were far more likely. In Massachusetts, there were 57 venture capital deals made per 1 million state residents, by far the highest nationwide.

These are the best (and worst) states for business.

The Best States for Business

10. Minnesota
> Real GDP growth, 2012-2013: 2.8% (13th highest)
> Average wages and salaries, 2013: $49,222 (14th highest)
> Pct. of adults with bachelor’s degree, 2013: 33.5% (10th highest)
> Patents issued to residents, 2013: 4,292 (9th highest)
> Projected working-age population growth, 2010-2020: 1.7% (9th highest)

Based on eight categories, including 47 measures, Minnesota is the 10th best state for business in the country. Informing the state’s high quality of life rank, just 8.2% of Minnesotans did not have health insurance in 2013, the fifth lowest rate nationwide. Also, the state was one of the safest, with a violent crime rate of 223.2 reported incidents per 100,000 people, among the lowest rates in the nation.

The state also received one of the highest scores for Infrastructure. Compared with other states, Minnesota businesses can also expect relatively well functioning transportation system. For example, just 11.5% of the state’s bridges were deemed structurally deficient or functionally obsolete, the lowest rate nationwide and less than half the national percentage of 24.3%. Businesses in the state also have the benefit of a relatively well-educated workforce. More than one-third of adults had at least a bachelor’s degree versus less than 30% of Americans. And 92.4% of state adults had completed at least high school as of 2013, the fourth highest rate in the country.

ALSO READ: America’s Happiest and Most Miserable States

9. North Dakota
> Real GDP growth, 2012-2013: 9.7% (the highest)
> Average wages and salaries, 2013: $46,775 (20th highest)
> Pct. of adults with bachelor’s degree, 2013: 27.1% (20th lowest)
> Patents issued to residents, 2013: 111 (2nd lowest)
> Projected working-age population growth, 2010-2020: 0.4% (2nd lowest)

North Dakota’s oil boom has spurred strong growth throughout the state’s industries, in residents’ personal incomes, and in employment. Less than 3% of the workforce was unemployed in 2013, the lowest in the country. As a consequence of the high levels of investment and spending in the state, North Dakota’s GDP grew nearly 10% in 2013. While this was by far the highest growth rate nationwide and more than five times the national growth rate of 1.8%, growth may slow considerably if oil prices continue to fall.

In addition to high wages and job opportunities, residents benefit from a relatively low cost of living. In 2013, the cost of housing required 26% of a typical household income, the second-lowest median annual affordability ratio nationwide. As in other states with a low cost of living, North Dakota also had a healthy infrastructure. Partly as a result, workers in the state benefited from an average commute time of less than 18 minutes, versus the national figure of nearly 26 minutes. It was the third lowest commute time in the country.

8. Virginia
> Real GDP growth, 2012-2013: 0.1% (3rd lowest)
> Average wages and salaries, 2013: $53,267 (10th highest)
> Pct. of adults with bachelor’s degree, 2013: 36.1% (6th highest)
> Patents issued to residents, 2013: 1,886 (21st highest)
> Projected working-age population growth, 2010-2020: 7.5% (21st highest)

Virginia’s large capacity for innovation, and high quality labor force helped make it the eighth best state for business. The Old Dominion State scored in the top 10 of states for the percentage of STEM jobs — jobs related to science, technology, engineering, or mathematics. More than 36% of adults in the state had completed at least a bachelor’s degree, which helped strengthen the labor force. The state also fared very well for its business-friendly regulatory environment, its relatively low poverty rate, and its comparatively low energy costs.

What held Virginia back from an even higher overall ranking was its weak infrastructure, which was ranked lowest among the states. Residents had one of the longest average commuting times of 27.7 minutes, and the state spent among the least per mile on road repair. Virginia also struggled with weak real GDP growth, 0.1% in 2013, third lowest in the country.

ALSO READ: The Worst Paying Jobs for Women

7. Colorado
> Real GDP growth, 2012-2013: 3.8% (6th highest)
> Average wages and salaries, 2013: $51,537 (11th highest)
> Pct. of adults with bachelor’s degree, 2013: 37.8% (2nd highest)
> Patents issued to residents, 2013: 2,793 (14th highest)
> Projected working-age population growth, 2010-2020: 8.6% (14th highest)

Colorado’s business climate is among the best in the country largely due to a strong labor market and an especially strong and innovative technology sector. These features are interwoven as a highly educated workforce is essential for innovation. Nearly 38% of adults in Colorado had at least a bachelor’s degree as of 2013, the second highest rate nationwide. As of that year, 14% of adults had completed a graduate or professional degree, a higher percentage than in all but a handful of states. The state’s population is projected to grow by 13.4% from 2010 through 2020 versus an estimated national growth rate of 7.1%, which also contributes to a strong labor market. Nearly 22% of all jobs in Colorado were STEM positions, the seventh highest proportion in the country.

6. Texas
> Real GDP growth, 2012-2013: 3.7% (8th highest)
> Average wages and salaries, 2013: $50,643 (13th highest)
> Pct. of adults with bachelor’s degree, 2013: 27.5% (23rd lowest)
> Patents issued to residents, 2013: 9,222 (2nd highest)
> Projected working-age population growth, 2010-2020: 16.1% (2nd highest)

Like a majority of the best states for business, Moody’s and Standard & Poor’s rated Texas’ credit among the best in the nation. The Lone Star State also led the states in the value of exported goods, which totalled nearly $1.9 trillion in 2012. There were also 386 public use airports, the most in the nation. Curiously, while Texas had the third most post-secondary schools in the nation at 420 in 2013, it actually had the second lowest percentage of adults who had completed at least high school, at 81.9%. Texas benefits considerably from its abundant natural resources. For example, the mining industry accounted for 11.1% of the state’s GDP in 2013, the sixth highest such contribution in the country. Other kinds of businesses do not do particularly well in Texas. The information, finance-insurance-real-estate, professional and business service industries contributed relatively little to the state’s GDP.

5. Delaware
> Real GDP growth, 2012-2013: 1.6% (20th lowest)
> Average wages and salaries, 2013: $51,093 (12th highest)
> Pct. of adults with bachelor’s degree, 2013: 29.8% (19th highest)
> Patents issued to residents, 2013: 453 (15th lowest)
> Projected working-age population growth, 2010-2020: 8.9% (15th lowest)
Based on several factors, Delaware’s regulatory climate was the most favorable nationwide for business. With high percentages of tech workers and strong independent investments, Delaware is also among the best states for innovation. More than 21% of all jobs in the state were STEM jobs, the eighth highest proportion in the country. The average venture capital investment of nearly $14.2 million per deal in 2013 — the second highest such figure nationwide — also reflects the high level of innovation and easy access to capital in the state.

Not so strong was Delaware’s infrastructure, which rated worse than most states. However, the consequence for businesses may be relatively small as businesses are concentrated in industries not especially dependent on transportation. For example, the financial industry, in which goods and services are relatively intangible, accounted for 42.1% of state GDP in 2013, the highest such contribution nationwide.

For the rest of the list, please go to 24/7WallStreet.com.

TIME Innovation

Five Best Ideas of the Day: February 23

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. The propaganda war against ISIS doesn’t tell us anything about the real fight.

By Paul Waldman in the Week

2. Programs supporting women-owned small businesses will boost the economy.

By Claudia Viek at the American Sustainable Business Council

3. System-wide disruption — including a new medical school admissions test — is remaking medical education.

By Melinda Beck in Wall Street Journal

4. Prison reform could unleash resourcefulness and hustle currently behind bars. The tech sector should get on board.

By Baratunde Thurston in Fast Company

5. The first power plant powered by ocean waves is officially online.

By Kaleigh Rogers in Motherboard from Vice

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY advice

Help! Should I throw a party for my employees or give bonuses?

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Here's your chance to give advice in the pages of MONEY magazine.

Did you ever want to be a personal-finance advice columnist? Well, here’s your chance.

In MONEY’s “Readers to the Rescue” department, we publish questions from readers seeking help with sticky financial situations, along with advice from other readers on how to solve those problems. Here’s our latest reader question:

As a small business owner, what’s a better use of funds: throwing an employee social event to build camaraderie and improve morale, or giving that money to workers as a bonus?

What advice would you give? Fill out the form below and tell us about it. We’ll publish selected reader advice in an upcoming issue. (Your answer may be edited for length and clarity.)

Thank you!

To submit your own question for “Readers to the Rescue,” send an email to social@moneymail.com.

To be notified of future “Readers to the Rescue” questions and answers, find MONEY on Facebook or follow MONEY on Twitter.

MONEY Startups

3 Reasons to Take Your Startup in a New Direction

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Robert A. Di Ieso

Many successful companies changed up their business plans early on. Here's when you should too.

Podcast platform Odeo turned into Twitter. Check-in app Burbn switched its focus to photo sharing and became Instagram. Does your startup need a change in direction to succeed? Here are three signs it’s time to revamp:

1. Customers Are Telling You

Is your target buyer consistently asking for something you don’t offer? “Customers exist because you make them better off,” says Gary Gebhardt, an associate professor of marketing at Canadian business school HEC Montréal. Listen to them.

2. Your Idea Isn’t Sticking

Do you have a hard time holding on to business? Go beyond focus groups and surveys. People often misrepresent their behavior. Instead, says Gebhardt, observe your customers going about their day. “When you see how people do things, you see how you can create a solution,” he says.

3. The Competition is Winning

Look at why people are favoring your rival’s product. But don’t panic pivot, says Steve Blank, co-author of The Startup Owner’s Manual. “A pivot requires substantial evidence that your original hypotheses for your business were incorrect.”

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