Business Education

Considering Setting Up an Employee Profit-Sharing Plan? Here’s What You Need to Know

When it comes to small businesses, one of the biggest challenges is finding ways to keep employees happy and motivated. This, especially in challenging times such as these, when there’s a labor shortage and even qualified individuals aren’t seeking new opportunities or becoming statistics of the Great Resignation. What’s more, it can be tough to compete with larger businesses when it comes to salary and benefits. One way that small businesses can attract and retain top talent is by setting up an employee profit-sharing plan. In this blog post, we will discuss the pros and cons of employee profit-sharing plans and why they are so beneficial for small businesses.

Biggest Concerns Small Business Usually Have about Employee Profit-Sharing Plans

There are a few drawbacks to setting up an employee profit-sharing plan as well. Obviously, the biggest concern is the expense. There can be some costs associated with setting up and maintaining a profit-sharing plan. Doing so can be complex. Profit-sharing plans are generally nuanced, and it is important to make sure that they are set up correctly. Otherwise, it could create problems down the road. Moreover, these programs usually include tiers, making them even more difficult to establish in the beginning.

A profit-sharing plan, also referred to as a deferred profit-sharing plan, gives employees a share in the profits of the company based on the company’s earnings. Employee profit-sharing plans have distinct advantages, which contribute to a small business’s overall morale and bottom line. —Houston Chronicle Small Business

Employee trust is yet another common issue. Employees need to trust that the company is doing well and that their hard work is actually contributing to the company’s success. If there is a lack of trust, employees may be less likely to participate in the profit-sharing plan. In other words, at least some plans require employees to give up part of their immediate compensation (or future earnings).

Pros of Employee Profit-Sharing Plans

However, though downsides do exist, there are several benefits to setting up an employee profit-sharing plan. Some of the biggest benefits that create win-win situations for employees and businesses alike include:

Increased morale and motivation. When employees see that they are benefiting from the company’s success, they will be more motivated to work harder and be a part of the company’s success.
Increased productivity. When employees are motivated and feel appreciated, they will be more productive in their work. This boosts overall output and contributes to a healthier bottom line, which likewise contributes to the profit-sharing model.
Attracts and retains top talent. Employees want to know that they are valued and that their hard work is being duly rewarded by making the company financially stronger. A profit-sharing plan shows employees that you care about them and want to reward them for their hard work.

Overall, setting up an employee profit-sharing plan can be a great way to attract and retain top talent at your small business. While there are some drawbacks, the pros far outweigh the cons. If you are considering setting up a profit-sharing plan, be sure to consult with an accountant or financial advisor to make sure you are doing it correctly. My firm has helped many of our Clients set up profit-share plans that have been very effective in providing incentives for those employees who qualify and contribute to the success of the business profitability. What other advantages and disadvantages would you include? Please share your own thoughts and experiences so others can make a more informed decision. Interested in learning more about business? Then just visit Waters Business Consulting Group.

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From Ketchup to Mercury: Medicinal Myths and Lessons for Small Business Evolution

December 26, 2024 No Comments

Throughout history, the pursuit of innovation has led humans down some surprising paths—sometimes with remarkable results, and other times with lessons learned the hard way. Two fascinating examples are ketchup and mercury, both of which were once hailed as medicinal marvels. Yep. That’s right. Ketchup and mercury were use as actual medicines.

3 Common Long-Term Hybrid Workplace Challenges

February 17, 2022 No Comments

A hybrid workplace is one that employs a combination of traditional office workers and remote employees. This setup has become more popular in recent years as technology has made it easier for people to work from home. While there are many benefits to this arrangement, there are also some challenges that must be faced in order to make it work long-term. In this blog post, we will discuss three of the most common challenges: employee work time, fewer team interactions, and time-sensitive deadlines. Hybrid vs Traditional Workplaces Traditional workplaces existed for many decades before the introduction of hybrids, which of course, became ubiquitous during the pandemic shutdown. At that time, businesses hurriedly transitioned from tradition to hybrid. Of course, this triggered a learning curb. And, some businesses experienced mostly smooth sailing. But, others struggled to make it work. Regardless of how it started, what’s unfolding or about to happen unleashes some unintended consequences. One thing is clear about the future of work: At least in the near term — and possibly for much longer — hybrid work arrangements are going to be the norm for many organizations, in industries ranging from tech to pharmaceuticals to academia. There are good reasons why many companies and employees are excited about this mix of in-person and remote work — and equally good reasons why many feel trepidation about the shift. —Harvard Business Review Businesses always face challenges. From small to large, there’s no end to obstacles and issues. Going hybrid will solve some of those problems. Still, the transition and new normal will also breed new challenges. Fortunately, there are ways to cope and deal with those obstacles. 3 Long-Term Hybrid Workplace Challenges The great thing about a hybrid workplace is that it offers flexibility, freedom, and lessens commute woes and expenses. But, it does create unique challenges that weren’t likely present before its establishment. So, if your business is transitioning into a hybrid workplace or it’s already been implemented, here are three of the most common challenges facing hybrid companies: Employee work time. One of the biggest challenges faced by companies with a hybrid workplace is ensuring that employees are working the same number of hours. This can be difficult to do when some employees are in the office and others are remote. It can also be difficult to track employee time when they are working from home. In order to overcome this problem, managers need to have clear expectations about when their employees should be available for meetings or assignments and how long they are expected to work each day. This might include having regular check-ins with remote staff during normal business hours so everyone knows what is expected of them. Fewer employee team interactions. Another challenge faced by companies that have a hybrid workplace is that there are fewer opportunities for employees to interact with one another. For example, when people work from home they may not have as much time to talk about their day over lunch or exchange ideas in person during meetings. This can lead to feelings of isolation among employees which is never good for productivity levels. In order to overcome this challenge, companies need to find ways for employees to interact with one another even when they are not in the office. This might include using video conferencing tools or having regular team-building activities. Time-sensitive deadlines. A final challenge faced by companies with a hybrid workplace is that remote employees can sometimes have trouble meeting time-sensitive deadlines. For example, if someone is sick or has an unexpected emergency that requires them to be away from work for a few days then this could mean missing out on important projects which could lead to loss of revenue and customers. In order to avoid this problem, managers need to make sure they are clear about expectations when it comes down to deadlines so that employees know what needs to be done by when. This might include having regular check-ins with remote staff during normal business hours so everyone knows what is expected of them and how long they are expected to work each day. What other common challenges do hybrid workplaces face? Please take a few moments to share your thoughts and experiences so others can benefit from your input. Interested in learning more about business? Then just visit Waters Business Consulting Group.

Effective Ways to Deal with a Setback

May 7, 2019 No Comments

Setbacks are inevitable. They come in many shapes and sizes and some appear from out of the blue. When you encounter a setback, it triggers different emotions. You feel shocked, unprepared, perhaps angry or down. It’s only natural to feel bad after a setback but it’s how you handle it that really matters most. How to Overcome a Setback Everyone experiences setbacks, large and small. During these times it’s easy to feel overwhelmed and maybe even unappreciated. (This is especially true when it involves an interpersonal relationship.) Minor setbacks throw us off for a few hours but others are much more significant and really throw us in a tailspin. While we will all experience roadblocks, we will differ in how we handle them. Some of us have the resilience to just pick up the pieces and move on. Others find it difficult to let go. Either way, how do we learn from the tough times? —Entrepreneur.com Whatever the cause and no matter the size, it’s important to understand you aren’t out of options. Sure, you feel helpless to one degree or another. And, it does bring into question what’s all that time and effort for, anyway? But, if you put things into perspective, you’ll begin to realize it’s not the end-all, be-all. Effective Ways to Deal with a Setback We all know adversary helps to build character. Although, no one welcomes tough times, whether in the form of a setback or something else. So, here are some effective ways to deal with a setback you can put to use: It’s only temporary. Very few setbacks are insurmountable. And, most are only temporary. Realize it is just a temporary situation that will pass. It will only linger and bother you the longer you allow it. If you put it into perspective, it’s merely one of many temporary obstacles. Your goals remain. Sure, it does bring into question what all your hard work is for in the first place. And, it undermines your sense of accomplishment and success. While these are certainly true, it doesn’t change your goals. Refocus on your goals to help you overcome. Reset the timetable. Any setback will throw off the timeline, there’s little way around this fact. But, that doesn’t mean you can adapt and readjust your timetable to make it workable again. Take action, right away. Of course, the worst response is to do nothing at all. It will not get you past the situation and will only serve to make it haunt you even more. Take action straight away and you’ll start to feel better immediately. What other methods would you suggest to get past a setback? Please share your thoughts and experiences by commenting! Interested in learning more about business? Then just visit Waters Business Consulting Group.