How to Increase Generational Business Sustainability
You’re a small business owner who wants to make it to the end of the pandemic, the end of this year, and let’s face it—the end of next week. But what about your long-term plans? What happens to your business after you’re gone? How can you best prepare the next generation to take over?
Luckily, planning for the future benefits you now and generations after you. Here are key ways you can make your business more sustainable now and for the future.
Increase Profit Opportunity
If you’re a small business, take advantage of government incentives (like the recent Payment Protection Program) to use early payment discounts, buy products in bulk, or secure your supply chain. Get ahead of future disasters by taking advantage of paying lower fees in advance. If you can use your current cash to increase the opportunity of profits over time, take advantage.
Hire Better Employees
If your small business is hiring, consider raising your wages, adding in more flexibility, and offering competitive benefits to attract and retain top hires. With new work-from-home options and companies moving to unlimited PTO, future employees have more options than just the typical clock in, clock out, 9-5. If your company isn’t competitively hiring, you’re not getting the best workers the market can offer. More qualified and motivated employees means better work in the long run.
Try to hire the optimal amount of workers to get the best work done. This year, McDonald’s raised its wages by an average of 10% to attract more workers but uses 35% less employees than pre-pandemic. If you can raise wages by 10% and cut 35% of the people needed to do the same work, you just made money—and gained better (and happier) employees.
Keep an Eye on Inflation
Be sure to review your prices compared to recent inflation and take advantage of low interest rate loans now to prepare for higher inflation in the near future. Lower interest rates will ultimately increase your profitability and help you reach your long-term business goals.
Currently, inflation is rising right around 5% over the last 12 months, so if your savings and net worth has not also increased at that rate, you are losing purchasing power—and so is your small business.
Have you checked your profit margins and raised your prices lately? Because the costs of materials, goods, services, and much more are rising steadily.
The Federal Reserve is talking about “transitory inflation,” meaning this inflation is temporary. But with the costs of food and cars up almost 29% (which is crazy) some of this price raise is going to stick around long after next year.
Don’t fall behind. Every single month, you need to look at your pricing and look into your cash flow. Businesses are afraid of raising prices because they could lose customers, which is true. But if you’re not making the profits you were in the past, your future success is in jeopardy.
Need Help Planning Your Long-term Wealth?
Are you hiring the right people? Is your cash flow in check? Are you receiving the right tax credits from the government? These are all important—and often difficult—questions to answer for small businesses.
At Texas LLC Experts, we’re here to help and guide you through your businesses finances. If you’re interested in learning more, reach out to one of our specialists today.