Creative Ways Entrepreneurs can Expand their Small Businesses

The world has gone crazy. Well, it certainly seems that’s the case. Inflation continues to push up prices on just about everything. There’s a hot war in Europe that’s seriously impacting the free flow (and cost) of energy. All of this, not to mention an ongoing labor shortage, materials shortages, and plenty of other madness, wreaking havoc on day-to-day life. Of course, businesses aren’t immune to this madness — particularly small businesses. What this chaos does teach any entrepreneur or current business owner is the importance of retained earnings. But, what are retained earnings and how can small businesses build them up for difficult times that will inevitably unfold in the future? What are Retained Earnings Anyway? Retained earnings are an important part of any business. They are the funds that a company sets aside to cover expenses during tough times or to reinvest in the business. (Like now, when the entire world is topsy turvy and the economic circumstances are unstable and unpredictable, to say the least.) Retained earnings are an important concept in accounting. The term refers to the historical profits earned by a company, minus any dividends it paid in the past. The word “retained” captures the fact that because those earnings were not paid out to shareholders as dividends they were instead retained by the company. For this reason, retained earnings decrease when a company either loses money or pays dividends, and increase when new profits are created. —Investopedia.com During normal circumstances, retained earnings are generally used to expand. Examples include hiring additional employees, purchasing new equipment, bringing in new or more inventory to sell, or even acquiring new commercial property. But, when sales slow and the business isn’t earning enough, retained earnings can be used as savings to bridge the gap. How to Build Up a Business’ Retained Earnings One of the most important aspects of any business is its retained earnings. Retained earnings are funds that a company sets aside to cover expenses during tough times or to reinvest in the business. This money can be critical for businesses when they need to maintain cash flow during difficult periods or invest in new opportunities. There are two main ways to build up retained earnings. The first is to generate profits and reinvest them back into the business. This can be done by reinvesting profits into new products, expanding the business, or hiring new staff. The second way to build up retained earnings is to reduce expenses. This can be accomplished by cutting costs in areas such as marketing and/or overhead expenses. If you want your business to be prepared for anything, it is important to have a healthy retained earnings account. By reinvesting profits and reducing expenses, you can ensure that your company has the funds it needs to weather any storm. With a strong foundation of retained earnings, your business can thrive for years to come. Entrepreneurs should also Carefully Consider Retained Earnings if Buying an Existing Business When evaluating a company’s financial statement, it is important to look at the retained earnings line item. This number will tell you how much money a company has set aside to cover expenses during tough times or to reinvest in the business. If you are interested in investing in a company, it is important to make sure that its retained earnings account is healthy and growing. What else do you think new and existing business owners should know about retained earnings? Please share your own thoughts and experiences so others can better understand this important topic. Interested in learning more about business? Then just visit Waters Business Consulting Group.

Employee burnout. It’s a real problem, even when team members are working from home. (In fact, the issue can easily be exacerbated because there’s more pressure to perform amidst an atmosphere that’s not necessarily conducive to working and is also filled with distractions.) Just because people are working in a comfortable, familiar environment doesn’t mean they don’t still feel a sense of duty, responsibility, and pride. Ultimately, it’s these emotions which can undermine them and lead to employee burnout. So, read on to learn how to deal with these situations. Common Signs of Employee Burnout The most common signs of employee burnout are behaviors like disengagement, absenteeism, and lack of motivation and productivity. During virtual meetings and phone conferences, anyone who is suffering from burnout won’t be as engaged, will skip more and more meetings, and their attitude won’t reflect being motivated and/or productive. During any time of high unemployment, people are often afraid to take vacation, request work flexibility, or advocate for their work-life balance, mental health, and overall wellness–unless the company culture encourages them to. But with the added emergency-paradigm shift to remote work, which most workers and leaders alike have never experienced before, the challenges of how to communicate and find solutions to promote mental well-being are even more daunting. —Inc.com But, those aren’t the only signs of employee burnout. There’s also irritability, job dissatisfaction, and lack of achievement. People who are feeling burned out will probably be irritable, express to fellow team members their dissatisfaction, and will also tell others they don’t feel like they are achieving anything of value. 3 Effective Ways to Help Remote Workers Avoid Burnout Thankfully, there are ways to help remote workers avoid burnout. And, it won’t upend your operation or even cost very much. All you need to do is give them encouragement, let them have a good amount of autonomy, and say “Thank you,” in different ways. Here are some of the best ways to help your remote employees avoid work burnout: Acknowledge hard work. Just because someone isn’t in the office or on the job in a specific location doesn’t mean they aren’t giving it their all. As mentioned above, it can be very challenging to work from home precisely because it’s not equipped the same way as the workplace, and they must deal with all kinds of distractions. That means you should take the time to acknowledge their hard work. Focus on results, not hours. Sure, time spent on productivity is important. But, it’s certainly not more important than the end result. Instead of putting emphasis on the hours they spend “on the clock,” put your focus on outcomes — these are a far better measure of their efforts. Offer welcome and helpful perks. It’s also very helpful to give your employees some tools to reduce stress and access to positive experiences. Things like gym memberships, paid time off, and other perks can work wonders and bring a real strong return on investment. What other suggestions do you have? Please feel free to share your thoughts and experiences to help others. Your unique perspective and input could be of great benefit! Interested in learning more about business? Then just visit Waters Business Consulting Group.

What do you do with a client who keeps breaking their promises? It’s certainly not an easy problem to solve. And, even more difficult when you come to the realization you’re a bigger part of the issue than you originally thought. As is the case with so many complicated circumstances, you probably share a good amount of fault. That isn’t to excuse the promise-breaker. But, it does serve as a reminder that it takes two people to take responsibility. About Promise-Breaking Clients It’s a more common phenomenon that you might believe. Not that it’s justified or even reasonably expected. However, clients have many reasons why — yes, some are excuses — for not following through with their word. It could be something beyond their control. Or, just a change of heart (and perhaps, circumstances). It’s an old rule of life that we teach people how to treat us. Yet often we can struggle when it comes to managing accountability and calling people on broken promises. It just feels like less stress to say nothing; even to just do it ourselves. But here’s the deal: when you decide not to call someone on their broken promise and ill-managed commitment, you’re, albeit inadvertently, being part of the problem. —Forbes.com Regardless of how often it happens, it does happen. So, that’s something you should be prepared for, because eventually, you’ll run into it. Usually, it’s not out of malice or selfishness, but rather, unrealistic expectations. When it does happen, you should know how to respond. How to Deal with a Client Who Keeps Breaking their Promises There’s an old saying in the real estate sales industry, “Buyers are liars.” It comes from a modicum of truth, but is obviously more of an exaggeration. Although, it does point out how people tend to embellish or overstate their resources and intentions. If you have a client who doesn’t always follow through on his or her promises, try these suggestions: Remind them. The first time won’t be the last. So, let him or her know what you expected and that you’ll expect them to deliver in the future. You don’t have to be rude, just stern but kind. If you show you’re willing to call them out, he or she will be less likely to do the same again. Don’t make up for them. It’s tempting to pick up the slack yourself but that rewards their behavior by avoiding consequences. After all, you value your reputation and take pride in your work. So, you make up for the short fall. But, this will only backfire. You’re only teaching him or her you’re always there to make things right. So, they don’t have to worry about it. That will only lead to more trouble. Don’t stay vulnerable. This is the most difficult, though it’s sometimes unavoidable. If it happens more than once and you don’t say anything, expect it to keep happening. Conversely, if you let them know you’re not going to tolerate his or her behavior, you can help break the cycle. What other suggestions do you have for dealing with a client who breaks their promises? Please share your thoughts and experiences by commenting! Interested in learning more about business? Then just visit Waters Business Consulting Group.