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.

If you’re anything like the average person, your parents probably instilled in you the courtesy to apologize. Saying you’re sorry is one of the most important keystones of polite society. So, it should definitely not come as a surprise that very politeness eventually turns into second nature compulsion. In fact, people use the phrase way too often and don’t really think about its effects. Now, in purely interpersonal situations, this is probably quite benign. But, when you’re running a business, this habit could cause a lot of unnecessary trouble. Apologizing isn’t Always Positive Of course, there have been academic studies confirming that apologizing too much tends to have adverse outcomes. It not only shows a willingness to capitulate, but it also underscores an underlying weakness. Furthermore, the same studies reveal that it can cause anger or resentment in others – two emotions you definitely want to avoid, if at all possible. After you hurt someone’s feelings or do something wrong, it turns out that saying sorry might not be the best solution. In fact, an apology might just add fuel to the fire, a recent study by researchers from Dartmouth College and the University of Texas has found. —Entrepreneur.com Apologizing too much doesn’t always result in dire circumstances. But, it may also easily create the impression that you’ll simply go along to get along no matter what. In other words, give the impression your preference is to avoid any and all confrontation, because it is too uncomfortable for you to handle. Obviously, none of these things are good for an entrepreneur, but this doesn’t mean you have to be stubborn, obtuse, or even mean. 3 Alternatives to Saying your Sorry When you apologize, you’re not only relating your own disposition, you’re sending signals to the other person or group of people. Fortunately, there are at least three handy phrases you can use in place of saying you’re sorry or apologizing outright: “I appreciate your patience.” Whether you’re late for an appointment or something is taking longer than it should have, save the apology and use this phrase instead. It has the same effect that you’re looking for but doesn’t put the blame solely on you and compliments the other person. “Thank you for working with me.” This is a great alternative when things aren’t going according to plan. In a sense, you’re still apologizing, but you are not doing so directly, and again you are giving the other person a nice compliment. “Here’s a slightly different perspective.” Rather than blurting out an apology for something you haven’t said yet, use this expression to bolster your credibility and get people to actually listen to what you have to say. This is a terrific way to join in on a conversation or to bring your point of view up. What other suggestions do you have for apology alternatives? 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.