Business Education

Tesla is Now Asking Suppliers for Cash Back, Here’s How to Avoid that Scenario

Tesla is back in the news. Headlines proclaim the electric car manufacturer actually approached some of its suppliers, requesting cash back in an effort to realize profitability. Elon Musk quickly reacted to the reports. Now, it’s a he-said-she-said storyline. But, that’s just another fight the media will happily play up for clicks and tune-ins. The reality is Tesla is not a profitable company. Even though it enjoys so much buzz and customer loyalty, it can’t turn a profit.

The Top Reason Small Businesses Fail

The company reportedly burned through $1 billion in a quarter. And, it’s promised to bring its expenditure to under $3 billion this year. That, after it went through $3.4 billion last year. Not to mention, it lost $710 million in Q1 of this year alone.

Just as good cash flow keeps a business afloat, poor cash flow can sink it. In fact, poor cash flow is a big reason why one in every four businesses doesn’t make it past the first year. And why more than half don’t survive past the fifth. —Fresh Books.com

It gets worse. The company might not reach a stock conversion price of $560.64. Which means it will have to shell out $230 million to obtain a convertible bond in November. Its stock fell by nearly 4.5 percent just in the last twelve months and continues to struggle.

This is an important lesson to those who’d like to start a small business because it’s one of the main reasons startups fail in the first place: inadequate cash flow and reserves. Problems with cash is typically the reason small businesses fail.

Top Small Business Cash-Flow Mistakes to Avoid

So, if cash is the biggest reason new companies fail, then how do they actually get into such a pickle? Well, it’s not just avoiding bad business ideas (although that’s certainly helpful), it’s more about being smart with money in the first place:

Impulse spending. We all know retailers embrace this practice. But, it’s far too easy to fall into the trap of impulse spending, particularly during the startup phase. It’s also a shortcut to failure because it’s the ultimately lack of responsible cash management.
Past-due receivable apathy. When cash is rolling in, it’s very easy to let an invoice or two or more slide. After all, there’s plenty of money coming in, so why bother? It’s important to stay on top of receivables because it sends the wrong signal when you become apathetic. Plus, you might be able to put that money to good use in the future.
Not sticking to a real budget. You wouldn’t spend more money that’s in your personal bank account. However, when it comes to business finances, too many owners just don’t adhere to a realistic and strict budget. And, that’s a recipe for failure.
Failure to put some cash aside. Feast or famine. That’s an old cliché but it’s entirely true for many businesses. That reality means it’s best to have some cash on-hand when needed because it’s very likely that time will come.

What other ways do small business mishandle cash? What other advice would you give about maintaining positive cash-flow? Please share your thoughts and experiences!

Interested in learning more about business? Then just visit Waters Business Consulting Group.

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How Established Businesses Can Smartly Break into Emerging Cottage Industries

September 22, 2023 No Comments

How Established Businesses Can Smartly Break into Emerging Cottage Industries The business landscape is constantly evolving, and emerging cottage industries are a testament to this incredible dynamism. These small-scale, niche markets often represent new opportunities for both startups and established businesses alike to explore. However, established businesses face unique challenges when entering emerging cottage industries. So, let’s go ahead and take a look at what to expect. Why Established Businesses Should Consider Entry Obviously, existing companies with a solid customer base would expect to grow their profits by getting into new spaces. But, there are other advantageous motivators. For instance, established businesses should consider entering a new cottage industry for several compelling reasons: Diversification. Entering an emerging cottage industry can diversify an established business’s product or service portfolio, reducing reliance on a single market. Growth potential. These industries may be in their infancy, offering significant growth opportunities for early entrants with proven business skills. Consumer trends. Many consumers prioritize local, artisanal, and sustainable products, making these markets attractive for established businesses. Plus, getting into a cottage industry can create a competitive advantage. Entering early can establish a strong foothold, making it difficult for competitors to catch up. Strategic Ways Established Businesses Can Enter New Cottage Industries Emerging cottage industries are small, niche businesses that are often based on traditional skills or crafts. They are usually started by passionate individuals who are eager to share their products and services with the world. Established businesses can see a number of benefits to breaking into emerging cottage industries. These industries can offer new opportunities for growth, innovation, and differentiation. They can also help established businesses to connect with new customers and markets. However, there are also some challenges that established businesses need to be aware of when breaking into emerging cottage industries. These industries are often highly competitive, and it can be difficult to gain a foothold. Additionally, established businesses may need to adapt their business models and strategies to succeed in these new markets. Here are some tips for established businesses on how to smartly break into emerging cottage industries: Do your research. The first step is to identify emerging cottage industries that are relevant to your business and that have the potential for growth. Once you have identified a few potential industries, research them thoroughly to understand the trends, the competition, and the customer base. Identify your niche. Once you have a good understanding of an emerging cottage industry, you need to identify your niche. What unique value proposition can you offer to customers in this market? What products or services can you provide that no one else can? Partner with existing businesses. One of the best ways to break into an emerging cottage industry is to partner with existing businesses in that industry. This can give you access to their customer base, expertise, and resources. Invest in marketing and branding. It is important to invest in marketing and branding to build awareness of your business and your products or services in the emerging cottage industry. Make sure that your marketing and branding are tailored to the specific needs and interests of your target customers. Be patient and persistent. It takes time and effort to build a successful business in any industry, but it is especially important to be patient and persistent when breaking into an emerging cottage industry. Don’t expect to see results overnight. Entering emerging cottage industries can be a rewarding venture for established businesses. With thorough research, strategic adaptation, a commitment to authenticity, and a long-term vision, these businesses can successfully navigate and thrive in these promising markets. By understanding the unique dynamics and values of cottage industries, established businesses can harness new growth opportunities and stay ahead of the curve in an ever-changing business landscape. Interested in learning more about business? Then just visit Waters Business Consulting Group to learn more about us and the services we offer. You can phone 602-435-5474 or send us an email.

What Is Influencer Marketing and How Can It Help Small Businesses on Small Budgets

March 1, 2024 No Comments

What Is Influencer Marketing and How Can It Help Small Businesses on Small Budgets? Influencer marketing has become an essential part of the marketing landscape in recent years. It’s a powerful marketing approach that allows businesses to reach their target audience in a uniquely authentic way. So, read on and we’ll take a few moments to explore what influencer marketing is and how it can help small businesses on small budgets. What Is Influencer Marketing? Influencer marketing is a form of marketing where brands partner with influential individuals to promote their products or services. Most of the time, these influencers have a significant following on social media platforms and can help businesses reach their target audience more effectively. However, influencers aren’t just found among such individuals – they are also everyday people. Influencer marketing can take many forms, from sponsored posts to product reviews and giveaways. The key to successful influencer marketing is to find the right influencers for your brand and to build a relationship with them. In other words, someone who is a respected member of your community and someone who others trust. So, just about anyone with a good reputation who is also outgoing. For instance, volunteer coaches for kids’ sports leagues, parishioners in a church, individuals who perform residential services, and so on. You likely know one or two, perhaps three or more people who fit this description. They’re well-liked, trustworthy, and have a good rapport with others. How Can Influencer Marketing Help Small Businesses on Small Budgets? Influencer marketing may sound super-expensive, but it can also be an affordable and effective way for small businesses to reach their target audience. You just have to know what you’re looking for and how to go about it smartly. So, here are some ways that influencer marketing can help small businesses on small budgets: Reach a targeted audience. By partnering with influencers who have a following in your niche, you can reach a highly targeted audience. This can be more effective than traditional advertising methods, which can be expensive and may not reach your target audience. Build brand awareness. Influencer marketing can help you build brand awareness by getting your products or services in front of a new audience. This can be especially helpful for small businesses that are just starting out and need to build a following. Boost credibility. When an influencer promotes your product or service, it can help to boost your credibility. This is because their followers trust their recommendations and are more likely to try your product or service if they see that the influencer has endorsed it. Cost-effective. Influencer marketing can be a cost-effective way to reach your target audience. Many influencers are willing to work with small businesses on small budgets, and the return on investment can be significant. Overall, influencer marketing is a powerful tool that can help small businesses on small budgets reach their target audience, build brand awareness, and boost credibility. By partnering with the right influencers and building a relationship with them, small businesses can see significant returns on their investment. Want to Accomplish More? Do you want your company to grow faster and earn more while you spend more time with your family doing all the things you started your business to do? We can make that dream a reality. Give us 30 minutes and we will show you how to get your life back. Skeptical? Good! Put us to the test. You can call us for your free appointment at 602-435-5474, or, if you prefer, send us an email. You can also visit us at Waters Business Consulting Group to learn more about us and the services we offer.

You Don’t have to Meet a Politician to Find a Hypocrite — Your Mirror Might just Reflect One

March 1, 2019 No Comments

Rep. Alexandria Ocasio-Cortez just moved into a luxury apartment in Washington D.C. It doesn’t contain one affordable housing unit. In fact, the complex doesn’t even comply with D.C.’s Affordable Dwelling Units program. This, after campaigning on a platform which included “Safe, affordable, adequate housing for all.” George H.W. Bush infamously said, “Read my lips. No new taxes.” LBJ promised the country not to escalate America’s involvement in the Vietnam War. George W. Bush campaigned, in-part, against excess government spending. Then, expanded several federal programs. How Hypocrisy Hurts Businesses The list goes on and on and on. Bernie Sanders, who rails against wealth inequality, owns three houses, has a net worth of about $2 million, and earns a six-figure salary. You get the idea. And, these are just a handful of politicians. It doesn’t include entrepreneurs, celebrities, professional athletes, and other public figures. As a business owner or manager, it’s important to practice what you preach. If you require employees to be available 24/7 while you’re MIA, or you’re constantly texting on the job while you prohibit employees from using their phones, for example, your hypocritical behavior is sending the wrong message to employees, and they may resent you for it. —Business News Daily Of course, hypocrisy is everywhere. When it occurs in a business environment, it’s very harmful. Hypocrisy undermines your ability to lead. After all, it’s essentially telling your employees to literally do as you say, NOT do as you do. You lose respect. It compromises your standing. Plus, it makes it very difficult for others to even work with you. 3 Key Ways to Avoid Hypocrisy as a Business Leader Hypocrisy is a dangerous trait. It essentially subverts morale and threatens the very viability of a business. It can even go so far as to cause a self-inflicted implosion. So, just how do you avoid being hypocritical? Here are a few helpful suggestions for how to avoid hypocrisy as a business leader: Practice self-awareness. You might call this “practice what you preach.” It’s an obvious reminder but one definitely worth mentioning. Every day, you should stay vigilant and stay self-aware about your own behavior. While it’s not rocket science, it’s quite difficult to put into practice. Be consistent with decisions. It’s almost impossible not to have or even show bias. We all do it in a variety of ways. You might treat team members differently due to your own personal biases. When making decisions, consider all sides of the equation. Actively solicit constructive criticism. It’s always good to encourage feedback from your employees (as well as your customers). And, doing so could reveal hypocrisy you commit but don’t consciously act against. What other advice would you give about avoiding hypocrisy? Please share your thoughts and experiences by commenting! Interested in learning more about business? Then just visit Waters Business Consulting Group.