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Strategic Moves Small Business Owners can Make during Rising Inflation Periods

Rising inflation is affecting both consumers and businesses alike. As the dollar’s purchasing power decreases, and prices for goods and services rise, a vicious cycle ensues. Small business owners are obviously not immune to this damaging dynamic. These small companies experience a decline in sales volume and their top lines fall. Fortunately, there are some strategies that small business owners can use to their advantage, even as inflation rises. While these moves won’t magically make all their problems disappear, they will help them to get through this trying time and even realize a greater profit in the future.

Expect the Unexpected

It is very easy for small business owners to get comfortable in their routines. So, when circumstances change, they generally are not prepared. The shock can lead to making rash decisions and as everyone knows, decisions made under duress don’t typically go very well. Because there is no way to tell how long this inflationary cycle will last, it’s best to adapt to the disruptive environment than to ignore it and hope to weather the storm.

An increase in inflation has a number of effects on the economy. First and foremost, it erodes purchasing power as the cost of retail goods and services increase. It can also raise the cost of borrowing as interest rates increase due to increased risk. Inflation increases can also fuel further inflation, creating a feedback loop. —Yahoo Finance

In other words, don’t just plan for the immediate short-term, think farther into the future and consider possible contingencies if this inflationary run persists past expectations. Since there’s no real way to know when it will end, it’s far more advantageous to be able to pivot and maneuver on short notice. Otherwise, you could get caught off guard and that could spell big trouble.

Strategic Moves Small Business Owners can Make during Rising Inflation Periods

The good news is that inflationary cycles don’t last forever, they are temporary. But in such situations, there will be challenges. So, you can use the following strategies to help your small business make it through inflationary times:

Offer long-term contracts. During periods of uncertainty, people relish the comfort of stability. Suppliers, vendors, and clients are no exception. Offer them long-term contracts at agreeable terms and that will alleviate some anxiety. It will also help to give you more peace of mind in the short term and can also help to set your business up for future success.
Invest in technology. Smart business owners take advantage of these circumstances by doubling down where it really counts. Technology gives businesses the power to increase productivity with fewer employees. Technology is a force multiplier. By expanding their technological assets, companies can not only meet but surpass client demands with fewer human resources.
Refinance your debt. Interest rates remain at near historical lows at the moment. But, they are likely to go up through the year. So now is the time to lock in a lower rate and refinance your debt. Paying just a little less in regular installments will help to free up cash for use elsewhere.
Resist shrinkflation, if possible. Consumers are very well aware that they are getting less and still paying the same amount or more. Big corporations use this sleight of hand and needless to say, the general public doesn’t like it. If you are able to deliver the same goods and services for the same prices as you normally would, continue to do so for as long as possible. This will most definitely help you stand out from the competition and your sales figures will reflect it.

What other suggestions do you have for small businesses that are dealing with rising inflation? Please take a few moments to share your thoughts and experiences so others can benefit from your perspective! Interested in learning more about business? Then just visit Waters Business Consulting Group.

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Do Businesses Really have a Credit Score?

February 26, 2021 No Comments

Do businesses actually have a credit score? The short answer is — yes. And, these measures of financial responsibility are calculated much in the same way individual credit worthiness is determined. Although it’s not something that’s widely discussed or known about in the consumer world, businesses do have credit histories, and therefore detailed reports which give them scores. Read on to learn the basics about business credit scores and what you need to know. How Business Credit Scores are Calculated As mentioned above, a business credit score is measured very similar to the way individual scores are calculated. Meaning, the length of credit history, types of credit used, payment history, debts owed, and other factors. Unsurprisingly, the better a business handles its financials, the better score it earns. Businesses of all sizes may need credit. A carpenter with no employees may want to borrow money to buy equipment. A marketing professional with a few employees may be ready to purchase furniture and computers for a new office. A salon owner with subcontractors but no employees may want to buy, rather than rent, commercial property. Any type of business could benefit from a business credit card. —US News and World Report Of course, there are some differences, one of the most minor being the scores themselves. While individual credit scores range from a low of 300 to a high of 850, business scores range from 0 to 100, with 100 being the highest. Additionally, business credit scoring services use different models in order to determine the creditworthiness of companies. Also, instead of there being three main credit reporting bureaus for individuals, Equifax, Experian, and TransUnion, there are two principal business credit scoring entities: Dun & Bradstreet and Experian. How to Improve a Business’ Credit Score Since business credit scores rely on many of the same elements as individual consumers, nearly the same factors are used to assign a credit worthiness score. So, in order to maintain or improve a business’s credit score, companies must do the following: Keep debts manageable. Opening too many accounts and taking on large amounts of debt will only increase your financial risk. This not only hurts your business’s credit worthiness, it also puts a lot of strain on you as the owner. This is why it’s best to keep your credit accounts to a minimum and pay off as much debt as possible. Utilize different types of credit. Credit mix is also a consideration, meaning businesses having different types of credit accounts. While it’s advantageous to have various types of credit, it is equally advantageous to keep these to a minimum so you’re able to pay what’s owed in a timely manner. For instance, you might finance or lease vehicles through your business, have a business credit card, and maintain vendor credit accounts. All of these will go into determining your business’s creditworthiness. Be vigilant with your personal credit. One misnomer that entrepreneurs have about business credit is that it’s somehow separate from their personal credit and/or financial responsibilities. However, this is completely false. Business credit accounts almost always require an individual or personal guarantee. This of course means that if the business defaults on a line of credit, you are personally responsible for that particular debt. Moreover, business credit is partially scored on your personal credit, so it’s best to maintain a good personal score for the benefit of your company’s creditworthiness. What other suggestions do you have about maintaining a business’ credit score? Please take a moment to share your thoughts and experiences so others can benefit from your perspective! Interested in learning more about business? Then just visit Waters Business Consulting Group.

Want to Make the New Year a Success? Avoid these People

December 30, 2017 No Comments

The New Year will soon be upon us. And, the majority will make different resolutions. Usually, these are about personal goals — going on a diet, getting in shape, and spending more quality time with family and friends. But many of us will also include a few business goals on our lists. And, there certainly isn’t anything wrong with this. Of course, this comes with its own set of challenges. One of the biggest, is avoiding toxic personalities. Why Avoiding Toxic Personalities is So Difficult Okay, that’s great and it’s also all-too obvious. Who really seeks out toxic personalities? Well, no one does — at least not consciously. But, isn’t it strange how we all seem to attract crazy? Or at the very least, difficult. So, what is so difficult about avoiding bad personalities? The answer is complex. Boil it down to logistics and it becomes more clear. We simply do not have control over who comes into our lives. Unfortunately, not everyone pushes us to be better. Some people stop us from following our dreams or talk us out of taking a risk, and we don’t always realize that it’s happening. So it’s important to be aware and consciously choose who we spend time with, to limit spending time with toxic people —Success.com To an extent, we can avoid known bad personalities. But, even this becomes difficult in the workplace. Sometimes, there is no real choice. You must accept the situation and make the most of it. However that doesn’t mean you don’t have any options at your disposal. Personality Types to Avoid in Order to Succeed The fact of the matter is, you become a product of the company you keep. It is a long-proven phenomenon. That’s precisely why there’s so much advice about surrounding yourself with good people. They’ll have a positive impact on you. As a result, you’ll achieve more and adopt a better outlook on life. As Jim Rohn said, “You are the average of the five people you spend the most time with.” But, this means there are personality types you need to avoid, like the following: Micromanagers. This personality tops the list because it’s the type no one can stand. Sure, management is a good thing. But, when it’s repeatedly taken to a granular level, it becomes counterproductive. Worse yet, it causes others to become resentful and unmotivated. Learning to solve problems independently is far more valuable. Short-term thinkers. There is nothing wrong with having a short-term game plan to reach a goal. But, it should fit into a larger scheme toward an ultimate goal. Short-term thinking is good for the near future but it’s an obstacle to long-term success. Pessimists. Pessimism isn’t always a bad trait. In fact, when it’s useful we call it pragmatism. That’s a good thing because it helps us to avoid unnecessary risk. But a pessimist doesn’t see anything but downside. When this happens, it’s very hard to move forward confidently or at all. Big spenders. Spendthrifts are also a bad influence. They don’t take financial responsibility. And, the results are often bad. Of course, there are times when it’s okay to spend but constantly splurging is just a recipe for ruin. Which other personalities do you avoid? Which personalities are a real asset to entrepreneurs? Please, share your thoughts and experiences by commenting and joining the discussion! Interested in learning more about business? Then just visit Waters Business Consulting Group.

Have You Tried the Discarded Napkin Test?

October 29, 2017 No Comments

Have you tried the discarded napkin test? Perhaps you’ve never heard of it because it isn’t an actual thing. But, this simple sociological experiment does reveal some fascinating insight into how we perceive others and gauge various environments. Don’t bother Googling it, you won’t find any on-point results. However, that doesn’t mean it’s not useful. Try the Discarded Napkin Test for Yourself The discarded napkin test is a simple one. And, it clearly demonstrates the importance of appearance. Here it is: go into a casual restaurant prior to the lunch hour rush. Crumple a clean napkin and place it on a clean but empty table. Sit nearby and watch how many people past the “tainted” table up for another. Eventually, if there’s no more tables available, someone will muster the courage to clean it off. Or, give into the frustration of the limited seating options and swipe it to the floor. Many workplaces have dress codes, particularly workplaces in industries in which image is highly valued and workplaces in which employees have regular face-to-face contact with customers. Whether you are considering setting a dress code for an existing workplace or trying to decide whether your new retail store will require employees to adhere to a dress code, consider the broad benefits and potential drawbacks — like backlash from casual-dressing employees — of such a move. —Houston Chronicle The point is, people will choose to sit elsewhere even when the only flaw with a table is a discarded napkin. That’s it. Its unpleasing appearance is enough to turn off person after person. Although a bit strange, it’s true. And, it begs the question — are employee dress codes good or bad? Employee Dress Codes Pros and Cons Okay, so there are a number of dumb office rules that drive employees crazy. But, some make sense to enforce. When it comes to employee dress codes, it’s not always cut and dry. This means, while an employee dress code can actually be a good policy, it can also be a bad idea. Here are some employee dress code pros and cons to consider: Pro — professional appearance. The single biggest benefit of an employee dress code is it provides a professional appearance. It’s especially useful in retail settings and offices. In the former, uniforms distinguish employees while the latter, business casual provides a professional yet laid back experience. Con — stifles personal style. Although a dress code does provide a more professional experience, it also can stifle personal style. That can mean rebellion, particularly in an office setting. Team members might feel an imposition and possibly a bit untrusted. Pro — provides “uniform” experience. Of course, you’d like your business to send a uniform message, which uniforms undeniably provide. However, in an office setting, this is a little more problematic. But, broad rules with clear prohibitions usually works well. Con — needs consistent policing. Now, the biggest downside of any dress code is the need to police it constantly and consistently. Otherwise, it’s just a suggestion and not enforced policy. At least, that’s the way employees will feel. What other pros and cons of employee dress codes have you experienced? Do you favor a strict dress code or a loose one? Please share your thoughts and experiences by commenting! Interested in learning more about business? Then just visit Waters Business Consulting Group.

Strategic Moves Small Business Owners can Make during Rising Inflation Periods

Expect the Unexpected

Strategic Moves Small Business Owners can Make during Rising Inflation Periods

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Do Businesses Really have a Credit Score?

Want to Make the New Year a Success? Avoid these People

Have You Tried the Discarded Napkin Test?