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Creating
a financial plan is like making a cream puff
Every summer
my wife Monika and I and our 3 children, have a family day at the
State Fair. My parents meet us there. (They can provide extra “kid”
support if things get ugly.)
Our tradition,
within minutes of arrival, is to purchase cream puffs. After our
cream puff appetizers, we do the usual things. We eat good food,
look at the animals, eat good food, watch the Kids from Wisconsin,
and eat good food.
The last
thing we do is get back in line for another cream puff. If you
are unfamiliar with State Fair let me describe the situation. There
is always a long line for the famous State
Fair Cream Puff . To keep you entertained, the line you stand
in goes past a bunch of windows behind which all the cream puffs
are born.
Now this is a sophisticated operation. (It needs to be to create
the 300,000 or so cream puffs in the 11 days of the fair). As
you move through the line you go past the bakers, the slicers, the
mixers, the puffers ???, and finally the sellers. The sellers
are at the end of the line where you are rewarded for your patience
with a delicious cream puff. 
So what does this
have to do with Financial Planning? I was wondering the same thing
as I stood in line watching the cream puff team turn out a couple
of hundred more puffs in the few minutes I was in line.
Here are the four ways creating a financial plan is like making
(a few hundred thousand) cream puffs.
- Don't try to do
it yourself. If you wanted a few hundred thousand cream puffs
you could find a recipe, perfect your technique, and spend the
rest of your weekends baking and puffing in your kitchen. Or you
could be like State Fair and build a cream puff team.
Business owners need to build a financial planning team if they
want a good financial plan. This team works with the business
owner to design and implement a Financial Plan.
- Build a Team of
Professionals. The cream puff is created by a diverse group
of specialists in the cream puff field. As mentioned earlier there
are bakers, slicers, mixers, puffers, and sellers. (There are
probably others as I am not a cream puff expert myself.)
In the financial world your planning experts may include your
Accountant or CPA, Attorney, Banker, and Financial Planner. Each
of these professionals are involved in your business and your
personal finances working on their pieces of your financial puzzle.
The accountant is involved in taxes. The banker manages loans
or cash flow and so on.
- Set Goals for your
planning team. At State Fair the goals of the cream puff team
are to create consistently delicious cream puffs in huge quantities.
And, from what I tasted, they succeeded wonderfully.
In your financial affairs you also need to set goals. Do you want
a consistently delicious financial plan? Are you tying to grow
the business? Transition to retirement? Protect the family? Diversify
into other investments? etc. Once you know where you are trying
to go, your team can help you get there.
- Have your team
work together. The entire cream puff team was right there
at the fair working in the same area. It was easy to coordinate
the cream puff production. For instance, if a change was needed
in the cream puff, the baker could adjust the oven to compensate
for changes needed by the slicers.
Your financial team should work closely as well. I recommend that
they get together on a regular basis to organize your financial
plans. By meeting 2-4 times a year everyone on your team
can stay informed and help you avoid the problems created by lack
of communication.
So there you have it.
Creating a financial plan is like making a cream puff.
This
communication is strictly intended for individuals residing in the
state of Wisconsin. No offers may be made or accepted from any resident
outside Wisconsin.
This newsletter is not legal or tax advice. Consult with a qualified
professional before using any stratagy.
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