Easy Ways to Build Up Retained Business Earnings

The U.S. Bureau of Labor Statistics estimates about one-third of new businesses fail in their first two years of operation. Approximately half go out of business within the first five years. Banking statistics reveal around 82 percent fail due to cash flow issues. Those are grim and stark figures. But, these unfortunate circumstances can be avoided by building up a business emergency fund in the form of retained earnings.

Top Reasons to Save Retained Earnings

There are several benefits to saving retained earnings in any business, no matter how small. (But more particularly, for medium to large sized organizations.) Obviously the most important is for emergency situations. It could be a natural disaster, a pandemic, a sizable dip in the economy. Regardless, emergencies do happen and your business will benefit from having savings in-place.
Retained earnings reflect the amount of net income a business has left over after dividends have been paid to shareholders. Anything that affects net income, such as operating expenses, depreciation, and cost of goods sold, will affect the statement of retained earnings. —The Blueprint, a Motley Fool Service
Another advantage of having retained earnings ready-to-go is for opportunity buys. Your business might have the good fortune of being able to purchase inventory and/or equipment in bulk at a substantial discount. Or, there might well be a circumstance where cash becomes temporarily tight. Retained earnings are an ideal source of capital that can later be replenished.

Clever Ways to Save Retained Business Earnings

It’s not always easy (or simple) to put aside money within a business that isn’t specifically for something like inventory, equipment, materials, et cetera. But, there are ways to save retained earnings for your business — it just takes a substantial amount of discipline and patience. Here are some effective ways to save retained business earnings:
  • Make it simple. Rather than trying to save money in a business checking account and “pad” the balance, open a dedicated account, such as a money market (since it earns interest) and that will provide more incentive to set money aside. This way, you’ll largely avoid the temptation to spend what you’ve ostensibly saved.
  • Automate savings. Once you have a money market account to save retained earnings, set up automatic deposits to go into that account on a regularly scheduled basis. After a time, it won’t be such a big deal and you’ll grow accustomed to it.
  • Take advantage of discounts. If you’re planning on a big purchase and have a budget set for the expense, take some time to find the same item at a discount. Or, broaden your search to find something similar but less expensive. Then, take the difference you save and put it in retained earnings.
  • Sell off old or unused items. You’ve probably bought one or more things in the past that you rarely use or have grown out-of-date. So, go through your assets and find prime candidates to sell off and then put the money into retained earnings.
  • Take advantage of higher revenue. Whenever business is good, it’s a good idea to put some money aside for a rainy day. While many business owners do this, it’s only sporadic. But, making this a priority and a habit will help to beef up retained earnings.
What other suggestions do you have for building up retained business earnings? Please take a brief moment to leave a comment and share your thoughts and experiences so others can benefit from your strategies. Interested in learning more about business? Then just visit Waters Business Consulting Group.

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No, It’s Not Too Late to Cash In on the Holiday Shopping Spree, but You’ve Got to Act Fast

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No, It’s Not Too Late to Cash In on the Holiday Shopping Spree, but You’ve Got to Act Fast The holiday season is a magical time for businesses, both large and small. While you might think you’ve missed the boat, it’s not too late to dive into the holiday shopping spree. In fact, with some strategic planning and swift action, small business owners can maximize their profits and make a significant impact during this festive period. Ways Small Businesses Can Take Advantage of Holiday Shopping The holiday shopping season is already underway, and small business owners know what that means: a chance to make a big chunk of their annual revenue. But with so many businesses competing for customers’ attention, it can be tough to stand out. If you’re worried that you’ve missed the boat on the holiday shopping spree, don’t despair. There are still plenty of things you can do to attract customers and boost sales this season. Here are a few tips: Make sure your website is up-to-date and ready for holiday shoppers. This means having a festive design, a user-friendly interface, and a secure checkout process. You should also ensure that your website is mobile-friendly, as more and more people are shopping on their smartphones and tablets. Offer holiday promotions and discounts. This is a great way to attract new customers and encourage existing customers to spend more money. You can offer discounts on specific products or services, or you can offer free shipping or other incentives. Run social media contests and giveaways. This is another great way to attract new customers and generate excitement about your brand. You can offer prizes such as gift cards, free products, or even a trip to your store. Partner with other local businesses. This could involve cross-promoting each other’s products or services, or hosting a joint event. Partnering with other businesses is a great way to reach a new audience and increase your visibility. Get involved in your community. Sponsor local events, donate to charities, or simply volunteer your time. Getting involved in your community is a great way to build goodwill and show potential customers that you care about more than just making money. If you follow these tips, you’ll be well on your way to a successful holiday shopping season. But remember, you need to act fast. The holiday shopping season is short, so it’s important to start planning and implementing your marketing strategies now. More Strategies Small Businesses Can Use to Promote Their Products and Services During the Holidays While the above advice will certainly help, if you’ve already got most or all of those bases covered, there are still other things you can do. So, here are a few additional tips for small businesses to cash in on the holiday shopping spree: Focus on your best-selling products and services. Don’t try to sell everything to everyone. Instead, focus on the products and services that you’re best at selling and that your customers love. Make it easy for people to shop with you. Offer a variety of payment options and make sure your checkout process is quick and easy. You should also offer free shipping or low shipping rates. Personalize your shopping experience. Send personalized emails to your customers with recommendations and special offers. You can also offer gift wrapping and gift notes. Provide excellent customer service. This is especially important during the busy holiday shopping season. Be responsive to customer inquiries and go the extra mile to make sure your customers have a positive experience. While it may be a little late in the game, small business owners can still cash in on the holiday shopping spree by acting swiftly and strategically. Understand the mindset of last-minute shoppers, optimize your online presence, leverage social media, offer irresistible deals, collaborate with local businesses, and maximize customer experience. Do you want to grow your company in 2024 but you are not sure what’s required to make that growth happen? Attend our “Planning for Growth” half-day workshop where you will get amazing details specific to your business for what’s needed from your marketing, your sales team, your production team, and your financial performance to enter 2024 with confidence you can indeed grow as planned. You will have the clarity you’ve always wanted but didn’t know how to create. It’s a $1495 value we are offering in November for only $99. Contact us for dates and times. We offer a 100% money-back guarantee if you don’t leave the workshop confident that you know what to do to grow your company in 2024. So, go ahead and contact us by phone or email! By phone 602-435-5474 By email: SteveM@WatersBusinessConsulting.com

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Tips for Transforming a Companys Culture

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Transforming a company’s culture isn’t for the faint of heart. It takes a lot of courage, dedication, and plenty of humility. While that’s sounds contradictory or confusing, it’s actually the case. You’re going to need to lead in a new direction and be able to take things in stride (at least, to a point). Because changing an organization’s culture will feel much like trying to push a boulder up a steep hill. At any moment, it can roll right over you. But, if you know a few ways to deal with this change, you’ll have a much better shot at success. Tips for Transforming a Company’s Culture It’s very common for a company’s culture to reflect the prevailing management style. Let’s face it, most individuals tend to hire people who reflect their own style, so this isn’t a surprise. That means if a hiring manager or another leader has certain bad habits, chances are excellent others on team will likewise possess those same or like behaviors. It’s also true that culture doesn’t form overnight. It takes time for a company culture to develop. As a [business owner] or as a manager, you may have the power to change your organization’s policies with the stroke of a pen. And you may have the ability to hire, fire, promote and demote people with relatively little effort. But changing an entrenched culture is the toughest task you will face. To do so, you must win the hearts and minds of the people you work with, and that takes both cunning and persuasion. —The Wall Street Journal Once that culture forms, it’s very difficult to change. People become complacent and it takes a significant event to shake that off. It could be a big change in the industry for the worse, losing a lot of money, a sudden shrink in customers, or something else. Great cultures drive productivity and profits. Poor cultures slow productivity and profits. Culture starts with Leadership. So, it’s very important to realize when the culture is toxic and/or when crazy has infiltrated the business. It’s at this juncture you need to take immediate action. Here are some helpful tips for transforming a company’s culture: Team-up with an insider. If you are new to the business, team-up with an insider — someone who can give you the details of what’s happened is a very valuable person. Or, if you’re part of a company that’s just gone awry, you still need someone you can trust. A person who gives you confidence you’re getting the straight story. You’ll learn a lot and probably discover different ways to get back on-track. Get feedback from team members. Aside from your go-to person, you still need to solicit feedback from the entire team. Encourage people to communicate their experiences and expectations. This is a great way to identify who is and isn’t working out. You’ll know by each person’s input and reactions who is an asset and who is a liability. Then, you can work with individuals to help them improve. Define the limits and be extra clear. While getting in-the-loop will provide a lot of valuable information, it’s not going to be a magic bullet. You’ll still need to define boundaries and be very clear on your expectations. Remember the old saying, “To be unclear is to be unkind.” It’s true and will certainly prove as much if you do not define your goals. Be bold and take the lead when necessary. What all of this means is, you’ll have to lead by example. You must set the tone day in and day out so everyone has a chance to adjust. Eventually, a new normal, a better culture, will evolve. Have you taken over an organization and changed its culture? How did you approach the situation? What other tips and tricks do you suggest to change a company’s culture. Please share your thoughts and experiences by leaving a comment. Interested in learning more about business? Then just visit Waters Business Consulting Group. [shareaholic app=”follow_buttons” id=”26833294″]

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