| How to Forecast Demand Posted: 08 Sep 2016 05:00 PM PDT Creating a successful forecast demand ensures that you have enough inventory for the upcoming sales period. A demand forecast looks at sales data from the past to determine the consumer demand in the future. With an accurate demand forecast, you will have operations that are more efficient, better customer service, and a reduced lead time on manufacturing products. An accurate demand forecast will help you avoid high cost operations, poor customer service, and product shortages. [1] EditGathering Information - Target specific products. Instead of focusing on a complete product line, identify the particular products you want to track. Doing this makes it easier to organize past data and forecast demand. For example, if you have an existing line of winter garments, focus specifically on gloves first instead of the entire line.[2]
- Focus on your products that earn you the most income. For example, many entrepreneurs adhere to the 80/20 rule, which states that 20% of products or services offered by a business generally make up 80% of its revenue.[3] Identify these products and track the demand for them.
- You may have to forecast demand for every product in your inventory, but it will be easier and more accurate if you do a few similar products at a time such as gloves, boots and winter hats.
- Consider creating a Sales and Operations Planning group that includes representatives from each department and task them with preparing a demand forecast.
- Review your marketing plans. Any marketing campaigns or sales promotions may increase the demand of your product. Look at the past data and see what was successful. See if there were special discounts or holiday sales that increased demand for your product. You want to take all of this into consideration when forecasting demand, particularly if you plan to repeat similar sales strategies.[4]
- Review key indicators. Find out what's behind the fluctuation in your customers' demand. Key indicators include demographics and environmental factors. Demographics include age, gender, location, and any other set of identifying characteristics. Identifying the demand of key demographic groups helps to narrow the data pool for the forecast. Environmental factors affect demand as well. For example, a severe winter might cause a decrease in sales.[5]
- Look at your marketplace. Analyze what competitors, customers, bankers, and other people in your marketplace are saying and doing. See if your competitors are running major sales or promotions.[6]
- Look at the previous months. Look at both recent months and annual sales variances such as holiday time. This will help you determine annual and seasonal fluctuations. When looking at the past months, analyze the driving patterns behind the demand. Look at any price adjustments or any marketing campaigns that led to a rise in new customers. Business always increases for a reason, and a smart businessman or businesswoman will find out why. For example, you may have run a "buy one, get one free sale" in August for back to school shopping. If you choose to replicate these factors, consider that in your forecast.[7]
- Determine your lead time. Lead time is the time between the initiation of an order and the delivery of a product. Knowing this will help you forecast demand. This will help you determine how fast you can make your product and meet demand.[8]
- If you are purchasing your products from another company, the lead time is the time between placing your order and when it arrives on your doorstep.
- You can also determine lead time by examining the raw materials and components. Knowing your required production time will help you make a more accurate forecast demand. Focusing on a particular item helps to predict how much material you will need and the production time to make your product.
- When you have your production quantities estimated, look at the component demand of each item. For example, if you are manufacturing pencils, you will need to know how much wood, rubber, and lead to order based on your forecast.[9]
EditDetermining Your Approach - Figure out which approach to use. There are four general approaches to forecasting demand. They include judgmental, experimental, relational/causal, and time series. Choose the best approach based on the history of your product. The experimental approach, for instance, is used mostly for new products that have no history data in the marketplace. These approaches are how you will gather most of your data.[10]
- You can combine the approaches to create a more accurate demand forecast.
- Consider judgmental approaches. This method draws upon the collective market insights observed by your sales team and managers to determine demand. These people can provide somewhat or, in some cases, very accurate demand forecasts based on their own personal knowledge and experience. However, the data you gather from them might be unreliable, as it relies on your experts' own personal views. For this reason, data derived from judgmental approaches are best used to make short term demand forecasts.[11]
- There are several different ways of going about this, depending mainly on who you use for your panel. However, you don't need to use them all for a proper judgmental approach. You may choose or any combination of them to achieve your goals, depending on which groups you think would provide the most accurate judgment.
- Determine if you need to use an experimental approach. This approach works best for new products, and it is not useful for existing products that have a historical demand record. This approach takes the results from a small number of customers and extrapolates the findings to a large number of customers. For example, if you contact 500 people at random in a particular city and 25% say they will buy your product within 6 months, you can assume this percentage applies to 5,000 people.[12]
- If a small group of targeted customers loves a new technology and responds well to the test marketing, you can extrapolate that number to also forecast national demand. The problem with this approach is that it often collects more information about the customer's preference towards your product rather than demand data.
- Consider using a relational/casual approach. This approach attempts to find out why people buy your product. The idea being that if you can understand why people buy your product, then you can create a demand forecast based on that reason. For example, if you sell snow boots, then you know the demand for your product is weather related. If the weather forecast predicts a heavy winter, you know that there will be a higher demand for your snow boots.[13]
- These approaches include life cycle and simulation models.
- Calculate demand using time series approaches. Time series approaches attempt to mathematically calculate demand using past figures and trends as a guide. Specifically, you can use moving averages, weighted moving averages, and/or exponential smoothing to attempt to accurately predict your demand. These approaches will give you harder numbers than other approaches, but must be combined with other, subjective approximations to account for the effects of future changes in the market or business plan.
EditUsing Judgmental Approaches - Form a jury of executive opinions. Gather a small group of high-level managers in your company and have them estimate demand. Each member of this group can provide valuable insight based on their experience with the market. They can also help in selecting quality material vendors and marketing campaigns. This approach is inexpensive and not as time consuming as other judgmental approaches. The downside is that these projections are based on the opinions of the experts who may be biased and pushing their own agendas.[14]
- Create a sales force composite. Ask each salesperson to project their sales. The sales team is closest to the marketplace and is knowledgeable about the desires of the customer. Combine these projections at each level of sales by city, state, and region. The upside to this approach is its low cost and the ease of collecting data. The downside to this approach is that it's based on consumer opinions, which can easily change. Also, the salesperson may inflate the numbers to help ensure his or her job security.[15]
- Hire individual market experts. Market experts watch for industry trends and consult with your sales force to predict demand. These could include trade magazine writers, economists, bankers, and professional consultants. An individual can only gather a limited amount information, however, so it is recommended that you assemble a team of market experts to gather as much data as possible.[16]
- These individuals can provide you with insight about the markets that is at a higher level than your own sales team may be able to provide. However, being outsiders to your company, they have less of a grasp on the demand for your individual products. You should use these people to forecast market demand and then estimate how well your company may fare within that market using internal judgments.
- Use the Delphi Method. First, create a panel of experts. This can include a group of managers, selected employees, or industry experts. Ask them individually for their estimate of demand. Have them answer questionnaires in two or more rounds. After each round, present the findings of the previous round anonymously. Encourage the experts to revise their answers with the previous findings in mind. The goal is that the group will eventually start to agree on the forecast.[17]
- Use a pre-defined stopping place such as a certain number of rounds, consensus, or stability in results.
EditUsing Experimental Approaches - Survey your customers. You can collect information from them in several ways: telephone or e-mail surveys, statistical reviews of customer order history, and market trends. Ask them about their purchasing plans and projected buying behavior. Use a large pool to help generalize results. Ask them how likely they are to buy your products and tally the results.[18]
- Customers are in the best position to know the demand for a product. The danger from surveys is that they often overestimate actual demand. While a customer may show interest in your product, actually buying it is a different thing altogether.
- Keep in mind that conducting surveys can be expensive, difficult, and time consuming. Surveys rarely form the base of a successful demand forecast.
- Use test marketing. Use this during the early stages of your product development. Find a small, isolated, area that has your targeted demographic. Roll out every stage of your marketing plan including advertising, promotion, and distribution plans. Measure product awareness, penetration, market share and total sales. Fine tune your market strategy based on the information you receive so that you will run into fewer problems when you launch your product nationally.[19]
- Host consumer panels. Gather a small group of potential customers in a room and let them use your product and discuss it. The customers are usually paid a small amount for participating. Panels are similar to surveys in that they are more useful to analyze the product rather than forming the basis for a demand forecast.[20]
- Use scanner panel data. Find a large set of household customers to agree to participate in an ongoing study of their buying habits at grocery stores, for example. Have these customers agree to submit information such as the size of their households, their ages, their household income, and any other information you find relevant to your product. Whenever they buy groceries, their purchases are recorded and analyzed. This data can be collected when they use their store grocery card. This creates a rich database to create statistical models and see relationships in data.[21]
- As with other types of experimental approaches, it can be difficult to apply these results to demand forecasts.
EditUsing Relational/Causal Approaches - Examine previous years' sales for monthly or seasonal trends. Look over sales figures for past years to determine which times in the year account for the higher percentage of your sales. Are they constant? Do you experience higher sales in winter or summer? Measure the increase or decrease in sales during these times. Was the change higher or lower in certain years? Then, think about why this might be the case. Use what you've learned and apply it to the current year's forecast.
- For example, if you sell snow boots, you might have experienced a particularly large boost in sales in a cold winter. If this year is forecasted to be a similarly cold winter, you should increase your demand forecast accordingly.
- Look for customer reactions. This refers to situations where a change in your product or its market resulted in higher or lower sales. Create charts of your historical sales for the product and mark important dates, for example a price increase or the introduction of a competing product. This can also be broader, like a reaction to the shifting economy or changes in consumer spending. Read relevant trade journals and newspaper articles to gather this information. Having all of this data at hand can give you a better idea of what might affect your future demand.
- Create a life cycle model. A life cycle refers to the "life" of your products, between when it was first introduced and the present day. Look at the sales of your product at various stages. Examine the nature of customers who buy the your product during these stages. For example, you will have early adopters (those who love the latest technology), mainstream buyers (people who wait for product reviews and referrals), laggards (they only buy when the product has been out for a long time), and other types of consumers. This will help you determine your product's life cycle trends and the demand patterns for your product.[22]
- The industries that use this model the most include high technology, fashion, and products facing short life cycles. What makes this approach unique is that the cause of the demand is directly linked to the product's life cycle.
- Use a simulation model. Create a model that simulates the flow of components into manufacturing plants based on your material requirement planning schedules and the distribution flow of your finished goods. For example, calculate the lead time to receive each component including shipping time no matter where it is sourced in the world. This will give you insight on how fast you can make your product to meet the demand.[23]
- These models are known to be difficult and cumbersome to create and maintain.
EditUsing Time Series Approaches - Use the moving averages method. This is a mathematical technique used if there are little to no trends present in your data. This method will provide an overall impression of data over time. Find out the actual demand for the previous three months. Once your have the total, divide that by four (accounting for the next month). The formula will be F4 = (D1 + D2 +D3) ÷ 4. In this equation 'F' represents the forecast and 'D' correlates with the month.This equation works well for steady demand.
- For example, forecast = 4,000 (Jan.) + 6,000 (Feb.) + 8,000 (March) /4 = 4,500.
- Determine the weighted moving average (WMA). If you have fluctuating demand, use this formula,which takes variation into consideration. The formula is WMA 4 = (W * D1) + (W * D2) +(W * D3). The 'D' stands for demand and the number correlates with the month. 'W' is the weighted constant, which is normally a number between 1 and 10 and is based on past history.[24]
- For example, WMA = (4 * 100) + (4 * 250) + (4 * 300) = 2,600.
- Use a greater weighted constant number for more recent data and a lesser number for older data. This is because more recent data has a stronger influence over the forecast.
- Determine exponential smoothing. This technique is an averaging method that considers recent changes in demand by applying a smoothing constant to the most recent data. This is a useful technique if the recent fluctuations are the result of an actual change such as a seasonal pattern (holiday time) instead of random changes. [25]
- Find the prior periods' forecast. This will be represented as (Ft) in the formula. Then, find the actual demand for product during that time period. This will be represented as (At-1) in the formula.
- Determine the weight being assigned to it. This will be represented as (W) in the formula.This ranges between 1 and 10. Assign the lower number for older data.
- Put your data into the formula Ft = Ft-1 + W * (At-1 – Ft-1) or for example, Ft = 500 + 4(W) * (590 - 500) = 504 * 90 = 45,360.
EditForecasting Demand - Compile your results. Once you have collected your data, create a chart or graph that shows the demand forecast. Do this by crossing your product demand quantity with the upcoming months. For example, if you create a line graph, put the months on the horizontal axis and product demand quantity on the vertical axis. If you forecasted that you will need 600 units in October and 800 in November, then place those points on the graph. Draw a line between the points. You can also plot past data on the graph to compare your research data with historical data.[26]
- Analyze your results. You now have your results tabulated or displayed in an easy to read form, but what do they mean? Look for trends, like growing or declining demand, and cyclicality, like busy seasons or months. Compare your data to that of previous years and see how it stacks up as far as volume and pattern. Look for evidence in the data that your marketing plans are working or have worked in the past.
- Additionally, go back and determine how exact you believe your forecast to be. Have you been optimistic with your forecast? How large of a margin of error do you expect?
- Display and discuss your forecast. Show your forecast to the appropriate people in your company and discuss it with them. Gather input from sales and marketing, finance, production, and all other managers and then revise your forecast. When everyone agrees on the forecast, they can plan a better business strategy.[27]
- Monitor and modify your forecast. As you gather new data, modify the forecast to reflect this. You want to use all information as it comes to you. If you do not constantly monitor and update your forecast, you can make costly mistakes and it will affect your financial sustainability.[28]
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| How to Prevent Kidney Disease Posted: 08 Sep 2016 09:00 AM PDT You might think that the kidneys only filter waste from your body, but your kidneys also regulate your blood pressure, protect your bones, and keep minerals and fluids balanced in your body, among other things. Unfortunately, one in three Americans is at risk for chronic kidney disease.[1] This disease most often develops as a consequence of another condition (like diabetes or heart disease) and develops over the course of several months or years. There are things you can do to reduce your risk for this damaging kidney disease. EditImproving Your Diet - Reduce your sodium intake. Watch how much sodium you eat and limit it to 2,300 mg of sodium a day. This is equal to about one teaspoon of salt. If you eat too much sodium, fluid can build up in your body causing swelling and shortness of breath. Try seasoning with herbs or spices instead of salt. Cut back on foods that are high in sodium. These include:[2][3]
- Sauces
- Salted snacks
- Cured foods and lunch meats
- Canned and convenience foods
- Cut back on sugars. Studies have shown that sugar plays a large role in contributing to obesity and diabetes, both of which can lead to chronic kidney disease. To reduce your sugar intake, read food labels since many foods contain sugar even if they aren't considered to be sweet treats. For example, condiments, breakfast cereals, and white breads are all high in sugar.[4]
- Remember to cut back on sodas since these contain high amounts of sugar. They also have kidney-damaging phosphorus additives and offer no nutritional value.[5]
- Note that added sugar comes in many forms — in fact, there are at least 61 different names for sugar you might find on an ingredients list. These include sucrose, high-fructose corn syrup, barley malt, dextrose, maltose, rice syrup, glucose, cane juice, and more.[6]
- Prepare your own food. When you make your own meals, you can choose whole grains, fruits, and vegetables that are minimally processed. Packaged foods that are processed are high in sodium and phosphorus additives which are bad for your kidneys. Try to eat 5 servings of fruits and vegetables a day.[7]
- In general, visualize a serving size of fruits or vegetables by looking at the size of your palm. One portion is about the amount of food you could hold in the palm of your hand.
- Avoid protein from saturated fats. Researchers are still studying the relationship between high-protein diets and chronic kidney disease. While you shouldn't avoid proteins, or even fats, you should reduce the amount of red meat, full-fat dairy and saturated fats that you eat to only a few times a week. If you develop kidney disease, your kidneys will work harder to break down the waste from eating and digesting meat.[8][9] Foods high in saturated fats include:[10]
- Processed meats: deli meat, sausages, cured meats
- Butter, ghee, lard
- Cream
- Hard cheeses
- Coconut or palm oils
- Eat unsaturated fats. You shouldn't completely avoid fats. Unsaturated fats, such as monounsaturated fatty acids and polyunsaturated fatty acids (which includes healthy Omeg-3 fatty acids), can reduce your cholesterol. Lowering your cholesterol can reduce your risk for heart disease which can cause kidney disease. To include unsaturated fats in your diet, eat:[11]
- Oily fish: salmon, mackerel, sardines
- Avocados
- Nuts and seeds
- Oils: sunflower, rapeseed, olive
EditMaking Lifestyle Changes - Exercise. Being overweight or obese can increase your risk for chronic kidney disease. You should exercise to help you lose weight and lower your blood pressure, both of which will reduce your chances of developing kidney disease. Try to get at least 150 minutes of moderate exercise every week.[12][13]
- Studies have shown that obese people are twice as likely to develop chronic kidney disease. If your Body Mass Index is over 30, you're considered to be obese.[14]
- Moderate exercises include walking, cycling, and swimming.
- Avoid tobacco. You might think that smoking damages the lungs the most, but it can cause heart disease. Heart disease, strokes, and heart attacks will make your kidneys work harder and can cause kidney disease. Fortunately, stopping smoking can slow the development of kidney disease.[15]
- If you're addicted to smoking, talk with your doctor about smoking cessation therapies. Your doctor might recommend nicotine patches or therapy.[16]
- Limit alcohol. When you drink alcohol, your blood pressure and cholesterol levels rise. These can contribute to high blood pressure which can cause chronic kidney disease. Although you don't have to stop drinking alcohol completely, you should limit yourself to 1 drink a day (if you're a woman) or 2 drinks a day (if you're a man under 65).[17][18]
- 1 drink is equal to: 12 ounces of beer, 5 ounces of wine, or 1.5 ounces of distilled spirits (liquor).
- Get regular checkups. Since kidney disease is difficult to detect until the disease has advanced, you should see your doctor for regular checkups. If you're healthy, aren't predisposed for a disease, aren't overweight and are under 30, you should see your doctor every 2 or 3 years. If you're healthy and between 30 and 40, see your doctor every other year. You can start getting annual checkups when you're 50, as long as you remain healthy.[19]
- If you've already been diagnosed with another chronic disease like high blood pressure, diabetes, or heart disease, it's important to work with your doctor to manage the disease since these can cause chronic kidney disease.
- Use medications for pain correctly. Analgesics and nonsteroidal anti-inflammatory drugs can damage your kidneys if you take a high dose for an extended period of time. Taking a high dose for a short period of time can temporarily reduce kidney function. Follow the manufacturer's dosing instructions if you take aspirin, acetaminophen, ibuprofen, ketoprofen or naproxen sodium.[20][21]
- Ibuprofen, aspirin, and naproxen are in a similar class of drugs, so taking a combination of these drugs at the same time can cause kidney problems.
- Acetaminophen products (such as Tylenol) are filtered through the liver, not the kidney, so it's preferred for people with kidney problems (so long as they have a healthy liver).
- Always tell your doctor what medications you're taking since some pain relievers — even over-the-counter drugs — can interfere with other medications.
EditRecognizing Kidney Disease and Getting Treatment - Watch for symptoms of chronic kidney disease. You might not notice symptoms right away since chronic kidney disease takes time to develop. Pay attention for:[22]
- Increased or decreased frequency of urination
- Fatigue
- Nausea
- Itching and dry skin anywhere on the body
- Obvious blood in the urine or dark, foamy urine
- Muscle cramps and muscle twitches
- Puffiness or swelling around the eyes, feet and/or ankles
- Confusion
- Difficulty breathing, concentrating, or sleeping
- Think about your risk factors. While preventing kidney disease should be important for everyone, it's especially important if you're predisposed to developing the disease. Your risk factor is higher if you have a history of high blood pressure, diabetes, or heart disease. African Americans, Hispanics, and Native Americans also have higher risk of kidney disease. People over the age of 60 are also at an increased risk for kidney disease.[23]
- If you have a family history of kidney disease, you may be at risk for some kidney diseases that have a genetic component.
- Get medical attention. Because many symptoms of chronic kidney disease are similar to symptoms caused by other diseases, it's important to get checked out by your doctor if you notice any symptoms. Your doctor can test your urine and blood for kidney function. With that information she then diagnose kidney disease or determine if another condition is causing your symptoms.
- Talk with your doctor about your family history, any medications you're taking, and any concerns you have about your kidney health.
- Follow the treatment plan. If your doctor diagnoses you with chronic kidney disease, you'll be treated for the condition that's causing it. For example, if a bacterial infection is causing your symptoms, you'll get antibiotics. But, since kidney disease is chronic, your doctor may only be able to treat complications.
- If your kidney disease is severe, you may be put on kidney dialysis or get a kidney transplant.[24]
- Your doctor might prescribe medications to deal with complications. Specifically, you might need medications to treat high-blood pressure, treat anemia, lower your cholesterol, relieve swelling, and protect your bones.
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| How to Get Power of Attorney Posted: 08 Sep 2016 01:00 AM PDT Power of attorney enables a person to legally make medical, financial, and certain personal decisions (such as recommending a guardian) for another person. You may need to grant someone power of attorney if you are incapable of handling all or part of your affairs for a period of time. The process varies from state to state, but in most cases it involves filling out a form and having it notarized.[1] EditDeciding Whether Power of Attorney is Right for You and Your Loved One - Talk to your loved one. If your loved one is ill and may be unable to make medical or financial decisions in the future, he or she may decide to grant power of attorney to someone.[2] It is easiest to obtain power of attorney with the permission of the person who may need to turn over decision-making rights (this person is known as the "principal"). In order for someone to grant power of attorney, he or she must be of sound mind. Talk to your loved one to make sure he or she understands what it means to sign over power of attorney. You must emphasize that they will vacate their decision-making authority.[3]
- Choose someone to be the agent. Because the decisions that the person holding power of attorney makes are legally considered the decisions of the principal, it's vital that the agent be someone you trust absolutely and without question. Consider the following when thinking about possible agents:[4][5]
- Consider how close the candidate is to the principal. The agent should be someone who knows the principal well so s/he can make decisions that would align with the principal's wishes and values. If medical and/or end-of-life decisions are included in the power of attorney, the agent should be aware of the principal's religious beliefs and wishes. Geographic proximity may also be desirable.
- Consider whether the candidate is in good health. An agent should be in good health and not likely to become incapacitated. Otherwise, s/he may not be able to carry out decisions on the principal's behalf.
- Consider whether you may wish to assign different agents for financial and medical decisions. Power of attorney is a huge responsibility. You may wish to discuss granting separate financial and medical powers of attorney to different people. This will reduce the burden on one person.
- Determine what type of power of attorney is needed. People can be granted power of attorney to act on medical or financial matters. A medical power of attorney enables someone to make medical decisions for a person who has become incapacitated. A financial power of attorney enables someone to make financial decisions for the person who grants it. Granting one type of power of attorney does not grant the agent rights to make other decisions. For example, granting a medical power of attorney will give the agent rights to make health care decisions, but not financial decisions such as buying or selling property.
 - A springing power of attorney does not go into effect until a specified qualification is met. Typically, power of attorney is granted following the incapacitation of the principal.[6]
- A durable power of attorney goes into effect immediately. It continues to be valid when the person who grants it becomes incapacitated. If the word "durable" is not specified, the power of attorney is voided when the person who granted it becomes incapacitated.[7]
- A springing durable power of attorney fits both of the above categories. It often will not go into effect until the person who grants the power of attorney becomes incapacitated. Therefore, a showing of incapacity must be made before the power of attorney will go into effect.[8]
- An ordinary or general power of attorney is comprehensive. It gives the agent all the powers, rights, and responsibilities that the person granting POA has. A person can use an ordinary power of attorney if s/he is not incapacitated but needs help in some areas. An ordinary power of attorney usually ends with the death or incapacitation of the person granting POA.[9]
- A limited power of attorney specifies the purposes for which the person's agent may act on his/her behalf. For example, it may grant the agent the right to make financial decisions related to property, but not other financial decisions.[10]
- Pursue legal guardianship if you cannot obtain power of attorney. If the person is already mentally incapacitated and did not grant power of attorney in a living will, it may be necessary to get conservatorship or adult guardianship. In most regards, the authority held by a guardian is similar to (but more limited than) those held by someone with power of attorney. A guardian is still accountable to the court, and must provide regular reports of transactions. To become a guardian of someone, a court must deem the principal to be "legally incompetent." In other words, they are judged to be unable to meet their own basic needs. If you believe someone you known meets the criteria for incompetence, you may petition the court to be named guardian.[11]
- The district court sitting in the county where the principal lives has jurisdiction over the case.
- Once you file the petition, the court will schedule a hearing. At the hearing, the proposed guardian must establish the incompetence of the proposed ward (the principal) and that no suitable alternatives to guardianship are feasible.
- Any interested party, including the proposed ward, may challenge the guardianship petition.
- Contact a trusts and estates attorney. Power of attorney documents are typically prepared as part of the broader estate planning process. You may need to work with a trusts and estates attorney to make sure that your power of attorney and estate plans are compatible.[12]
- You can ask your friends and family for referrals. If you already have another attorney for other matters, s/he may be able to recommend a trusts and estates attorney.
- County and state bar associations usually offer free referral services. Contact your local bar association and ask them about trusts and estates attorneys.
EditObtaining Power of Attorney - Check your state's requirements. Requirements for power of attorney are similar in most states, but some have special forms. Usually, the document granting power of attorney must identify the principal, identify the agent, and specify exactly what legal acts the agent is entitled to perform.
- Check whether or not your state has special forms for power of attorney. You can find the forms on the internet, including USlegalforms.com.[13]
- If your situation is complicated and you're unsure how to proceed, hire an attorney. An attorney can help you and your loved one carry out the proper requirements for granting power of attorney.
- Download or write a power of attorney form. In most states, power of attorney forms don't have to be government-written legal documents. However, for the sake of precision and clarity, it's a good idea to use a state-issued form as a template when available.
- Check your document for clarity. It must specifically name the principal, the agent (the person given power), and the type of powers granted. A power of attorney can provide broad powers or it can narrowly tailor the agent's responsibility.[16]
 - Make sure the form stipulates whether the powers are "springing," "durable," or "springing durable." These terms will clarify the moment at which power of attorney takes effect and how long it lasts. Again, durable power of attorney allows the agent to continue acting after the principal becomes incapacitated. If the principal wants to continue making decisions until a certain point, choose a springing power of attorney. For example, the power of attorney document could empower the agent when the principal turns 75 or has become incapacitated.
- Additionally, make sure that the principal and agent know the limits of power of attorney. If the power of attorney purports to transfer a power that cannot be transferred under the law, that part of the power of attorney is void. For instance, even if the principal and the agent agree, the agent cannot write or execute a will for the principal. Any such will is not valid.[17][18]
- Alternate agents may also be named, in the event that the first agent is unable or unwilling to act on his or her authority.
- Gather witnesses. In some states it is necessary to have the signing of the document witnesses by one or two people. For instance, in Florida, a power of attorney document must be signed by two witnesses while in Utah, no witnesses are required.[19][20] If necessary, make sure witnesses are present while the agent and the principal sign the document.
EditProtecting Your Power of Attorney Document - Consider hiring an attorney to review the document. An attorney may notice legal issues that those without legal training would miss. Even if you do not hire an attorney to look over the document, make sure that you clearly and specifically identify the powers that are being granted to the agent, when those powers will take effect, and when (if ever) those powers will cease to have an effect.
- Specific details are helpful. Instead of saying that the agent "has power over the principal's finances," say that the agent "has the power to withdraw money and make payments from the principal's three bank accounts: bank account X, bank account Y, and bank account Z."
- Have the power of attorney document notarized. Some states require the agent and the principal to sign the power of attorney document in front of a notary. Even if your state does not require notarization, notarization eliminates any doubt regarding the validity of the principal's signature. The notary must verify the identity of the principal before witnesses the signature.
- Notarizing the power of attorney document reduces the chance that it will be contested by an outside party.[21]
- You can check online to see if your state requires notarization. One site that lists such information for all states is USlegal.com.[22]
- Save the power of attorney document. A power of attorney is not filed at any governmental agency, but you must have it on hand to present it every time you use it. Keep it in a safe in your home or in a safety deposit box until the time comes when you need it.
- Make sure that if you are selected that you have the time to perform the power of attorney on behalf of the principal.
- You are not allowed to charge for acting as power of attorney on behalf of someone else. The only charges you can make are on food, lodging, and travel for performing your duties.
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