Genworth Hits Bump in the LTC Road

Just read a great article about Thomas McInerney the CEO of Genworth in the Richmond Times-Dispatch.  It started with a great line about investors being unhappy with the company lately and it helped put things in perspective for me. Genworth, by rejecting Wall Street’s cries to drop Long Term Care insurance, is setting an amazing example for other insurance companies. By putting their customers first and trying to find a new path for Genworth Long Term Care insurance, Genworth is boldly asserting the necessity of the service they provide. The company is admitting that they misjudged Long Term Care insurance in 3 specific areas, lapse rates, length of claim, and ROI on their product. The fact that they have isolated the areas that need adjustment is a positive step forward.

The lapse rates were anticipated at 5 or 6% and yet the actual rate was 1%. The demand for the insurance was much higher than anticipated. The older policies are the biggest problem that the company is facing. As the company moves forward they will not be basing their expectations on unfounded research, but on the track record of Long Term Insurance over the last 30 or so years. McInerney has been working with lawmakers in many States, not just to hike rates, but to make the process easier on everyone. Genworth wants gradual rate adjustments that allow the companies to make their business profitable while easing the stress on the policy holders.

The length of claim was underestimated as well and while it was a difference of months the steep costs of assisted living and nursing home care made a huge dent in Genworth’s quarterly budget. Again the biggest problem was on the older policies and McInerney has said that Genworth is only hoping to break even on those policies. The state of modern medicine has made people more reliant on home care and nursing homes. More illnesses such as Alzheimer’s are treatable and these treatments often require bed rest and people are left needing help. Genworth and the other companies who have stayed in the Long Term Care insurance game know that they are providing a necessary service.

Genworth has acknowledged that the return on investment that they had anticipated is simply not there for this product. They will of course adjust their business model and try to make a profit on it, but the riches they thought lay at the end of this rainbow are not there. What is at the end of this rainbow is offering people an affordable way to get the care that they need during a very vulnerable point in their lives. Vulnerable both physically and financially, and private insurance will allow them the freedom to get the care without having to jump through the hoops that are always associated with public insurance options. The more I read about the Genworth “crisis” the more my faith is renewed in the Long Term Care industry.


5 Reasons Why 9 Out of Every 10 Startups Fail

Over 62% of all businesses in the U. S are small businesses (with less than 5 employees). That’s according to the U.S. Small Business Administration. Roughly 540,000 Americans become new business owners every month. Out of these only, a meagre 10% succeed. That means 90% of all startups launched in this country are going down the drain. But why? This article explores some of the common reasons why 90% of startups fail.

1.   The Idea Was Never Good Enough

Who doesn’t have a business idea running in their mind right now? It’s one thing to have a business idea, and another to have an idea that really solves a big problem. Some of the most successful startups were businesses that solved a really big problem. Think of Facebook and their ability to make online social networking bliss, or Google and their power to make information access the least of your worries. Many startups fail because they don’t have a solution to a problem that is big enough (or that affects a lot of people). It’s important for entrepreneurs to rethink their idea and market viability before blindly letting the ship sale.

2.   Financial Problems

Of course, this is expected. Hundreds of thousands of startups fail every month because they someone cannot manage to survive tough financial times. Entrepreneurs should carefully think about their cash options. Does giving a piece of the pie away help the business stay afloat? Is the budget properly optimized to take the firm through till such a time when a profit can be turned. What strategies for obtaining funds or generating revenue (in the near future) are there? Are these strategies good enough?

3.   The Team is Not Good Enough

If there’s a crack in the team, then there’s a crack in the business – because after all, a business is all about the people running it. Many startups fail because the founders disagree and can’t get along well. Others fail because the entrepreneur doesn’t take the time to hire employees that really add value to the business. If you’re looking to build a business that can weather the storm during hard times, leadership and effective management are very crucial.

4.   Inability to Take on the Competition

In almost every industry, there’s serious competition for people who are looking to launch a new business. It’s often hard to topple the status quo. Think about it – stationery, kitchenware, electronics…many consumers already have brands that they trust. It takes serious work and a clever strategy to convince people to ditch these brands and go for your products. If a new business is not able to take on the competition, then there’s a very high probability that it will fail within its first 2 years.

5.   Founders Get Stuck

According to Nicolas Cole, a business contributor at, many startups fail because the founders get stuck and lack a sense of self awareness.

  • They want to scale their firms horizontally (which is easier) rather than vertically.
  • They fail to run hypotheticals that assume for the worst.
  • They make decisions about things they know little – or nothing – about.
  • They are unable to manage their personal emotional turmoil and thus take their feelings to work.
  • They tend to think that raising money will solve their problems.
  • They think they know a lot and try to prove it – rather than listening and paying attention to learn.

According to Mr. Cole, startup owners should refuse to get stuck on the original idea. They should be ready to pivot, learn, and adjust based on the existing conditions. This is very important because often – entrepreneurs become so wrapped up in their idea and vision that they lose the perspective. That’s why it’s often a good idea to seek venture capital from people who already understand your target market.

Being open-minded, flexible, and able to learn are some of the key factors that can make your startup a success. Make sure you do not ignore anything, and set up a team that can recover fast from the hard-knock of startup life.


Let’s Speak Easily About Business

Starting up a business is one thing, directing it to success is another. It is possible for anyone to begin a business but it takes a lot to maintain and have that business expanded over time. However, there are things to importantly consider before venturing into one. You must keep in mind the common mistakes when starting up on something like a business. Having knowledge on such matters would help you to avoid those same usual errors that most of the beginning entrepreneurs are committing on their first venture.

Not Creating a Strong Business Plan

Business plan is your groundwork for your venture. Many do not fully realize it but business plan is the essential embodiment of all your undertakings. You cannot go about the whole thing of putting up a business without a concrete structure of your whereabouts and where you are planning to go. Business plan helps you identify your goals, objectives, vision and mission and such will serve as your driving force, your pathway for your long term aspirations.

Of course, you got a plan, and you have the potential ideas otherwise you wouldn’t be able to come up on starting up a business. Thus to hold firmly to these aspirations of yours, make sure to create an excellent business plan that will include your marketing strategy on how are you going to work out the whole business thing. Without a business plan to support your undertaking, you are just like someone with lots of ideas floating on your “thought balloon” and those balloons are in the risk of being popped or pricked anytime.

Going Easy on the Market

Never ever go light about the market because that will be the main bloodline of your business. Not giving much importance on it is as much saying as not having the single interest to make your business succeed. Plan carefully your marketing strategy because that would be the key in regulating the good circulation of money in the business. An excellent marketing tactic would deliver to you what all business entrepreneurs are working hard for – more customer leads. Thus, a good business plan is not all enough until you put up on it a good marketing plan as well.

Defining your objectives, mission, and vision would serve as your motivation but a marketing plan would map out the ways on how to take appropriate actions to achieve these set goals and objectives. Business field is like one big arena and it just a matter of survival at the end of the day. When you are the leading and winning player, it doesn’t mean that you already have to relax all the way. Your rivals are just waiting for the right time to pull you down or beat you up, so always be secured with a good marketing plan because that would save you enough from much worse trouble.

Self-Limiting Thoughts

One common mistake that beginning entrepreneurs usually commit is setting up small goal, small ambition. It is just right to be realistic but it doesn’t mean that you can never dream much bigger. Just look on the successful business tycoons now and see way back on how and where they started. You might be awed to find out that some of them even started with lesser than what you already have at the moment. But because they aimed higher and bigger, they have finally made it to the peak of success. Dreaming bigger isn’t bad at all, fearsome maybe but fear of giant dreams are proven to be conquerable.

Not Seeking Advice

Anyone who’s new in the field must learn to seek advices from those who have been there already. All beginning entrepreneurs need assistance in one way or another. There might be some important notions that you are missing out so before delving deeply to the idea of venturing into the business, make a thorough investigation first of the field that you are planning to enter. Seek advices and opinions from different people and make sure that you are asking those who are knowledgeable about the matters.

It is not necessary however that you heed to their advices, not after you have carefully studied it and come up with the notion that their advices seem to not befit on your case. By then, you can go and search again for another person to ask. No matter how many useful advices you sought out, in the end it would still be up to you if you will take their suggestions or not. For sure, you have an idea of your own, only that you need others’ opinion to weigh out carefully which is the better thing to do and which is not.

Resisting Necessary Changes and Adjustments

In connection about seeking advices, another common error that new entrepreneurs commit is standing too firm about their idea. Resisting the necessity of changes is what often brings down a certain business. Right from the start, an entrepreneur must embrace the fact that no matter how he laid out a concrete business plan and map out an excellent marketing plan, there may still come an unexpected time that he needs to pose some changes and alterations on the over-all plan.

Being too rigid about your own idea, ignoring the negative implications that it might create would do nothing good about your business. But that kind of attitude would only pave the pathway down to the great failure of your endeavors. A potential businessman must learn to be flexible enough to adapt to the constantly changing environment of the business industry.

Draining Up Your Bank Account

Never did it become wise to give up all that you have, financially. When you are starting up a business, don’t invest too much beyond your financial capabilities. Doing that thing is close to committing a suicide. Though the potential percent of your planned business to succeed is 99% out of 100% still you cannot drain up your entire savings for that risky venture. Be wise enough to invest only the rightful amount and to start with the type of business that is within your capability to fund.