Recent reports by Sageworks, a financial information company, revealed the industries that are most and least profitable over previous years’ studies. According to their research, service-based businesses have low start-up costs, although they require specialized procedures of training and function services, which fare well in today’s market. This includes law offices, real estate brokerages, and accounting/bookkeeping firms.

On the other side of the spectrum, businesses and retailers in the food industry struggle with sales, with farming and grocery stores seeing close to no growth.

Bierman, a business analyst, said, “Because of their volume-based business model and competitive markets, margins tend to be smaller. Grocery stores and manufacturing companies are good examples. Often, their goods may be considered commodities, and charging extra for a loaf bread may drive consumers to a different store over time.”

If you are starting a business or planning to do so, here are some of the most and least profitable businesses in recent years.

Most Profitable Businesses

Tax Preparation, Accounting, Payroll Services and Bookkeeping

Not sure which business to start? If you are good with numbers, an accounting firm will be the ideal option to invest in. Over the previous years, tax preparations, bookkeeping, payroll services, and accounting have seen a remarkable increase of 17.84 percent in sales and are likely to gain profits because their start-up costs are low, and all you have to pay for is your employees, technology, and training. Alongside, it is a service-based business. Therefore, no money has to be spent on inventory. All one has to focus on is obtaining effective employees and building a reputable business name.

Legal Services

Similar to accounting, legal firms are a service-based industry that has seen a positive growth in sales of around 16.89 percent over the past years. They have small start-up costs that mainly include employees holding law degrees. Although an investment is required in special employee training and education, legal firms can generate a good amount of money.

Management of Enterprises and Companies

A 16.75 percent growth was noticed in this business realm. Therefore, it is a wise decision to invest in this industry. Typically, these businesses consist of privately owned banks or holding companies that are supposed to advise and further assist other companies in making essential management, operational, and financial decisions. Although the offices are niche and mostly offer specialized services with skilled employees, these kinds of companies often bring in a considerable profit.

Offices of Brokers and Real Estate Agents

The real estate industry has increased 16.6 percent over the past few years. Although the industry fluctuates, which can be hugely affected by changes in the market, it is wise to invest in this business when positive trends are noticed because real estate agents make good amounts of money when the business start-up is up and roaring.

Least Profitable Businesses

Gas and Oil Extraction

Gas prices were lower in 2017, similar to past years. Firms operating in the gas and oil industry have been noticing a drop in sales of around 4.24 percent. With major fluctuations in the market, competitors, and incredible barriers to entry, this may not be the best business to invest in.

Beverage Manufacturing

According to research, this is not the first time that beverage manufacturing has been on the list of the least profitable businesses to start. Although it covers both alcoholic and non-alcoholic drinks, the latest technology trends have introduced soda fountains and other types of drink dispensaries. Alongside, people are becoming more health conscious due to declining beverage manufacturing. Over the past year, more than a 1.49 percent drop in sales growth was noticed.

Bakeries

Whether it is due to major competition or the high costs of start-ups involving kitchen supplies, equipment, and overhead bakeries that are commercial, bakeries have been on the decline for a while now. According to research, a 0.81 percent drop in sales growth was noticed.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

As an entrepreneur, you know that taxes can be a headache. It can be overwhelming to track expenses, file on time, and ensure you’re taking advantage of all the deductions available. But fear not! With the right mindset and a few key strategies, you can make tax season a breeze and keep more of your hard-earned money in your pocket. Here are some tips and tricks for entrepreneurs navigating the tax landscape.

Keep Meticulous Records

The first and most crucial step in preparing for tax season is to keep meticulous records throughout the year. This means tracking every expense, every transaction, and every dollar that comes in and out of your business. Whether using a simple spreadsheet or a more robust accounting software, have a system that allows you to easily categorize and track your expenses. This will not only make tax season easier, but it will also help you keep a better handle on your finances year-round.

Stay Up-to-Date on Tax Laws

Tax laws can change frequently, and staying current on any new regulations or requirements that affect your business is essential. This is especially important if you operate in multiple states or countries, as tax laws vary widely depending on your location. Ensure you’re working with a qualified tax professional who can help you navigate any changes and comply with all applicable laws.

Take Advantage of Deductions

One of the biggest advantages of being an entrepreneur is taking advantage of a wide range of deductions that aren’t available to traditional employees. These can include everything from home office expenses to travel and entertainment costs. Ensure you’re keeping track of all of these expenses throughout the year, and work with your tax professional to ensure you’re maximizing your deductions and saving as much money in your pocket as possible.

Plan for Estimated Taxes

As an entrepreneur, you pay estimated yearly taxes based on your projected income. This can be a tricky balancing act, as you don’t want to overpay and leave money on the table, but you also don’t want to underpay and face penalties come tax time. Work with your tax professional to develop a plan for estimating your taxes throughout the year and ensure you stay on track.

Consider Incorporating

If you’re operating as a sole proprietorship, you may be paying more than you need to. Consider incorporating your business to take advantage of lower tax rates and other benefits. This can be a complex process, so ensure you’re working with a qualified attorney or tax professional to make the right decision for your business.

Don’t Forget About Retirement Savings

As an entrepreneur, you don’t have access to a traditional 401(k) plan, but that doesn’t mean you can’t save for retirement. Consider setting up a self-employed 401(k) or a SEP-IRA to take advantage of tax-deferred savings and ensure you plan your future.

Work with a Qualified Tax Professional

Finally, the most crucial step for navigating the tax landscape as an entrepreneur is to work with a qualified tax professional. This can be a complex and ever-changing landscape, and having an expert on your side can help you navigate any challenges and maximize savings. Look for a tax professional with experience working with entrepreneurs and small business owners, and make sure you’re working with someone you trust and feel comfortable with.

Conclusion

In conclusion, taxes may not be the most exciting part of running a business, but they are necessary. By following these tips and working with a qualified tax professional, you can ensure you’re handling your taxes efficiently and effectively and keep more of your hard-earned money in your pocket. Happy tax season!

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Cataloging small businesses’ problems and growth patterns in a systematic way that is useful to entrepreneurs seems, at first glance, a hopeless task. Small businesses differ widely in size and capacity for growth. They are characterized by independence of action, differing organizational structures, and varied management styles. However, on closer inspection, it becomes obvious that they experience common difficulties arising at similar stages in their development. 

These comparison points can be organized into a framework that increases our understanding of businesses’ nature, characteristics, and problems, ranging from a corner dry cleaning establishment with two or three minimum-wage employees to a $20-million-a-year computer software company experiencing a 40% annual growth rate. For owners and managers of small businesses, such an understanding can help assess current challenges, for example, the need to upgrade an existing computer system or hire and train second-level managers to maintain planned growth.

Developing a Small Business Framework

Numerous researchers over the years have developed models for examining businesses. Each uses business size as one dimension and company maturity or growth stage as a second dimension. While useful in many respects, these frameworks are inappropriate for small businesses. As great as start-ups can be for macroeconomic development, they can also be chaotic for various reasons.

1. The risk for start-ups is extreme, and the total cost can be exorbitant. Founders put in more time, energy, emotion, and capital than they ever thought would be required. And, since most fail, the total cumulative cost to launch start-ups that succeed is enormously underestimated.
2. Start-ups disturb the price structure. While trying to get a position in the economy and before they know what it takes to capitalize on business growth, a classic start-up exercise is to enter the market with low prices. This sounds like honest opposition and good for customers. However, established corporations know what they must charge to sustain their business. Even after a start-up runs out of investment and leaves the marketplace, damage to the price structure remains.

Small businesses that lasted the financial crisis and aftermath did so by establishing exactly what it takes to run their business in the leanest and meanest terms. One of the consequences of this trial by fire is that these firms have emerged in better shape than after significant economic bookkeeping downturns. Here are six reasons:

1. Fewer start-ups. There has been less price structure disruption since 2008.
2. The banking industry has confirmed an unparalleled lack of business loan demand, which is ironic because interest rates have never been lower.
3. Stronger balance sheets. Reduced debt plus methodical retailing, inventory, and supply chain practices that prevent inventory creep improve important financial ratios.
4. More gross profit. Rigorous expense control relieves pressure on gross profit from flat sales and pricing pressure.
5. Enhanced capital and cash. The above practices contribute to profitability, which is more likely to be retained in the current environment. Retained incomes push capital and cash toward sustained operations and long-term success.
6. More creditworthy. Firms that grow beyond organic funding will be more worthy of credit and preferred terms and rates.

Signs that your Start-Up is Maturing into a Small Business:

1. Customer needs do not appear to be evolving rapidly.
2. Consolidation by leading competitors is reducing economic intensity.
3. Disruptive innovations and new applicants gradually gain share and top out at relatively low levels.
4. Marketplace shares of leading contenders have hardened and are changing gradually, if at all.
5. The price, brand, and channel stratagem have replaced product innovation as key value drivers.
6. Cash flows progressively turn positive and return to investors rather than market investments.

Final Note

Small businesses play an important role in any civilization. When first recognized, they represent how corporate owners test their business ideas in a market. Small businesses that create jobs for labor, in addition to the owner, offer even more economic stability. Providing a steady source of income for business owners and employees is just one reason they are important.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

How do you feel seeing your company’s progress and all the profits you receive after much hard work? Let me tell you one thing. Profits are one of the main elements that affect your company’s progress.

To maintain your company’s progress, key performance indicators (KPI) help you assess your business’s success and build strategies to achieve your goals. As a business owner, you must keep track of your KPIs as they affect your company’s progress.

We have listed seven critical KPIs for small business owners to help you identify your business progress.

Gross Profit

The main element for every business is its profit. If your business spends more on suppliers and netting less in customer sales, it is time to change your business strategy. To determine your company’s profit margin, multiply your gross profit by 100 and divide it by your sales.

 Keeping track of this KPI is extremely important as it will tell you how much profit you generate, contrary to the amount paid to suppliers. If your business’s profit margin increases, continue with your strategy. However, if you see a decrease, you need to reduce your company’s extra costs like utilities or wages or increase the cost of goods.

Flow In and Flow Out

It is one of the most important key performance indicators for small businesses. Flow in and out helps business owners assess whether their sales and margins are appropriate. The first step is to estimate your sales for each week and month. Once you know your sales history, estimate your payment timings and likely costs. Generally, this process covers 12 months, which is also called Cash Flow Forecast.
It also helps in tax preparation, new purchases, or identifying any cash surpluses. For example, if you plan to purchase any business equipment, you add the cost to your forecast. The new statistic will tell you whether purchasing the equipment will help your business make profits.

Revenue Ratio

A company’s revenue depends on the company’s profit or sales growth. If your business income or sale is increasing, it is obvious that the revenue rate is also increasing. To ensure your company is progressing well, check the difference between the current year’s revenue growth rates and the previous year’s.

Inventory Gross

Inventory gross tells the company how much inventory it has sold over time. Keeping track of your inventory is important, as it will help you plan any adjustments if needed. 

Funnel Analysis

Funnel analysis lets you see how users move through a series of steps. It is a great way to track where users drop out – known as the funnel drop-off rate. It tracks the number of visitors who left the conversion process (the funnel). The conversion process depends on what type of business you run. Examples of conversion could be a shopping cart, subscriptions, and more. Once you identify where customers are dropping out, make strategies to boost your sales. In this technology age, many businesses rely on the internet as a sales tool, so funnel drop-off rate has become a key performance indicator to track.

Accounts Payable Rate

If you want your business to continue operating, ensure you have paid all your suppliers. Accounts payable measures the cost given to suppliers. It is hard for most business owners to track all their financial transactions. Hiring someone to oversee your bookkeeping will make your life easier and ensure no errors in your company’s accounts. This key performance indicator will help you identify whether you have to reduce the spending on suppliers to boost future profits.

 Market Share

This KPI assesses a company’s success and position in the market. How is your business performing compared to your competitors? It is the only KPI that needs regular tracking. If you do not know how your company’s progress looks compared to others, changing its strategies and policies is impossible.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

In today’s world, the term “entrepreneur” has more meaning to it than it ever had before. For some, it’s all about accumulating millions of dollars. For others, it’s more about establishing new bonds and breathing the new life they always dreamed about.

A few years ago, it was not in our wildest imagination that we would call ourselves entrepreneurs someday. Let alone speaking at seminars, discussing freelance projects, and guiding new entrepreneurs. What motivated us? What do we know that you should also know about modern entrepreneurship? We’ve highlighted a few key points below that will help and motivate you to become a better entrepreneur.

You Don’t Need to Invest Big to Get Started

In the entrepreneurial world, money is not the ultimate game changer! However, some people frame it as the most important thing. You can rest assured that far more significant things must be considered to make your business successful than money.

The two top things that other experienced entrepreneurs and we consider important are ideas and ambition. You’ll face many ups and downs when you begin your journey as a novice entrepreneur. It requires a lot of persistence to be able to brace all of those valleys and mountaintops. You might’ve already heard a lot about downfalls and challenging times, but what is interesting about modern entrepreneurship is that its ups (successes) also possess the same challenges. Modern entrepreneurship is a double-edged sword.

The most problematic stage for beginner entrepreneurs is the early stage of business, where they receive no appreciation, little to no monetary benefits, and much criticism. However, if you’re ambitious enough and eager to learn, you’ll get through all the difficult times. The key is determination!

Create Value Through Knowledge

It is often said, “The simpler the advice is, the better it is.” A straightforward piece of advice that we would like to pass on is to focus on creating value. You may ask, what do you mean by creating value? Simply put, creating value is leaving things better than they were previously. If your product is not creating value, it’s useless. A good value addition always inclines with the natural demand.

To create value, you need to learn something new every day. The best habit you can adopt is reading. Things are changing daily in modern entrepreneurship, and it’s difficult to keep track of all the changes. However, if you read, you’ll better understand the fundamentals of change. Once you’ve got a firm grasp on fundamentals, you can predict changes yourself. Knowledge is power!

Make Use of Technology

Don’t wait to be recognized – make the world see you. Modern entrepreneurship is all about making yourself visible to the right audience. You’ll find people you look up to in no time will contact you only if you know how to present yourself and are eager to learn from your mistakes. Making yourself noticed is far easier than it used to be. Many entrepreneurs use websites, blogs, and other social media platforms to showcase their talent. Don’t focus a lot on advertising. Instead, focus on generating value. If your content is good, you will get the right audience. Don’t aim to cover all of the mediums.

Stay focused. As an entrepreneur, you’ll be bombarded with many things diverting you from your business priorities. Make things simple and focus only on what matters. Even after you have become successful, focus on the important things. Build interpersonal relationships through the effective use of digital media. Focus on creating relations with your content. 

Don’t only post and update your online presence instead focus on building relations. Last but not least, use ‘DATA.’ There is a reason we have written it in all caps. Data helps you in bookkeeping and improving efficiency. Data will allow you to identify early trends and make adjustments accordingly. The best thing about technology is that it provides consistent, reliable data. Make sure to use it wisely.

Conclusion

The good thing about modern entrepreneurship is that you set your own pace. Your success is directly proportional to your hunger for success. The sooner you decide what you want to do with your life and how much energy you want to put into your business – the better the results will be. And you don’t have to wait another 2-3 years before you make a decision. Do it now and take baby steps towards a future you’ve always imagined.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

If you are an entrepreneur running your own business, you likely have a crucial role in your business’s growth and success. You are leading your business and playing the role of a salesperson, customer representative manager, developer, and project manager. Although you can hire employees or outsource specific roles, you need to maintain a check on all of these positions yourself.

Even if you are working as an owner of a very small business, you will never be free from following the law’s liability. Every registered business has to abide by the registering state’s law irrespective of its size. Even if you have started a small-scale business or are currently establishing one, you must know how to handle legal issues. You don’t need to hire a lawyer at an initial level. However, it would be best to acquire all of the business law knowledge. Here are five ways that will help you in protecting your small business against any legal fallout. 

Always Make Agreements in Writing

Trusting your clients and other business stakeholders is important because you are new to the business industry. However, many owners are ditched or manipulated later on, as no contract or written agreement was signed at the initial level. Whenever you start working with another agent, whether they are a service provider, client, business partner, or an employee, it is recommended that you sign a written contract that includes all of the terms and conditions. Doing so will resolve all upcoming disputes, as everything will be mentioned in the contracts.

Keep All Paperwork Updated

Once you finish all the contracts and paperwork, the next crucial task is to file and assemble your papers carefully. A business needs to have a proper bookkeeping system that updates all of the data whenever policy changes occur. Outdated paperwork is useless for a business as missing data creates confusion. For example, your company has paid and documented all the tax documents. However, you must update the previous document and records every time you pay your business taxes. This can be a troublesome and lengthy process, so one can hire an accountant or bookkeeper if they have enough resources.

Research and Learn about the Prevailing Laws

You may not be a professional lawyer; therefore, at times, you may make legal mistakes that you are often unaware of. Hiring a permanent lawyer for your small business is not a necessity. However, an entrepreneur can enhance their legal knowledge regarding their business industry and size. Plenty of information is available on multiple legal business websites, such as the US Small Business Administration domain.

According to the Small Business Administration website of the United States, we have mentioned a few essential points that every small business owner should know below.

1. Registering Intellectual Property, Copyrights, and Trademarks
2. Financial laws
3. Employment and Labor laws
4. Marketing and Advertising laws

Register your Intellectual Property

Intellectual property is fundamental if your business has an online existence or your business type is e-commerce. The reach of an online business is far better than a local business’s. By registering your intellectual property, it would be best to protect your business identities, such as logos, design, and ideas. There is a fine line between developing creative content and plagiarizing another person’s content. It is likely that if you have not registered your business trademark and have not reserved the copyrights of your business, another individual can copy your content, register it in their business name, and file a case against you.

Get Professional Legal Advice

When setting up your business’s legal formalities, nothing is more important than this. Suppose you are confused about setting up your business’s legal contract and are unaware of your business’s essential terms and conditions. In that case, you should enlist the help of a professional lawyer. The lawyer will not only read your business’s situation but also protect your business interest while giving you needed legal advice.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Beginnings are tough for start-ups, especially those trying to make their presence felt on social media platforms. While it is a fact that social marketing can help fast-track the growth of your start-up, damaging your online reputation is easy if you don’t do it correctly. If you are trying to get your start-up company off the ground, marketing is one of the things you need to invest your time and money into, apart from developing a great service or product.

If you plan to use social media to take your start-up to new heights, here are ten mistakes you should avoid at all costs.

Not Having a Plan

Social marketing is not about getting online and posting all you can about yourself and your start-up. Before you make your attendance felt online, it is imperious for you to have a social media strategic plan in place. Your social media efforts need a solid foundation and a strategic plan that outlines your objectives and details your services. Contact your lead sales and marketing members and identify your target audience.

Not Being Devoted to the Plan

If you’re not dedicated to your social marketing plan, your social media accounts will end up being inactive, which will, in turn, create a bad impression. Your social marketing plan is not a sprint; think of it as a marathon. If the results make you impatient, tweak your performance by analyzing metrics, adapting to audience behaviors, and tracking competition.

Selecting Random Platforms

Given the rise in social media platforms, you might think it necessary to market your brand everywhere. However, all social media platforms have a different purpose and set of users. Consequently, each platform has a different social media marketing plan. The key to marketing effectively on social media platforms is outlining your target customers.

Being All Over the Place

As mentioned, all social media platforms have a different purpose and, as such, require different marketing plans. You might not have the time and energy to come up with appealing content for several platforms being a start-up. Furthermore, you don’t need to post on platforms that won’t get your desired results.

Posting at Inappropriate Times

Simply knowing who your target customers are isn’t enough; you also need to know what time zones they live in and what time they are most active. Remember the adage, “Timing is everything,” when posting. Depending on the audience you are trying to reach, the best times to post are 6 am to 10 am ET to reach an international audience and 7 pm to 10 pm ET to capture the primetime audience.

Posting Too Often

While not posting can be bad for your business, posting too frequently can also be a deal-breaker. Get the balance right: posting something once or twice a month can cause your brand to become invisible, and sharing a dozen posts a day is way too much. Find out what works for your brand and stick to it.

Boring Your Audience

It is possible to bore your target audience without knowing it, so be cautious of what you’re posting at all times. Please talk with your spectators, engage them in conversation, attract eyeballs, use humor, ask genuine questions, and give intelligent answers.

Self-Promoting

People will unfollow you if you only talk about yourself and your company. Instead of spotlighting your start-up, focus on your target audience. Talk about things that interest your end-users, and you’ll engage them in interesting conversations.

Giving Users a Reason to Laugh

The worst thing you can do for your brand is to give your target audience a reason to laugh at you. Avoid blunders by thinking about your posts and taking the time to analyze probable outcomes.

Not Understanding Your Marketplace

You must understand your marketplace before spending your first dollar creating an ad. Thoroughly analyze your customer demographics or buyer persona’s psycho-graphics.

Conclusion

Social marketing mistakes have the potential to put a company out of business. As a start-up owner, you can never be too cautious about what you post online. So, put adequate thought into your social marketing plans and ensure you don’t make the abovementioned mistakes.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

It only takes a few Google searches to become overwhelmed by abundant information about entrepreneurial start-ups. Numerous stories exist on how this or that start-up transitioned into a victorious, reputable business. But, in various cases, you will be left trying to fill in the blanks or still searching for case studies significant to your industry or business model.

There is only one dependable method to get your industry to the next level. And that involves putting your faith in tried-and-tested ways other entrepreneurs have used to leap.

Focus on Productivity and Not Only on Activity

Shun the busyness trap and question what you must focus on today or in the future. Plan so that you know what your next steps are. Leadership expert and Coach Leah Wultschik has distinguished that when leaders engage in all ways of business, the never-ending center to get things done results in decreased creativity. You will constantly be in a reactionary state, leaving you unable to make strategic decisions.

Hire the Best Talent Possible

Surround yourself with world-class workers who bring priceless ideas rather than trying to squeeze what you can from second-rate employees. Aislinn Malszecki, who oversees content strategy and community at MaRS, suggests the following steps to be a focus for finding the best talent possible:

1. Avoid reactionary hiring: Founders frequently find themselves badly needing help and may hire without looking for the right fit and skill set.
2. Create a buzz for your company: Use your reputation and personal network to draw the right people to your business.
3. Tap into your network: In addition to posting jobs on your website and LinkedIn, influence your network as well as the networks of your employees to find like-minded candidates.
4. Building your team is not a subject to be taken lightly: Neighboring yourself with the right people can mean the difference between breaking through and remaining stagnant as a business. Work with people who motivate you.

Partner with an Agency

The opportunity cost of doing the whole thing alone can add up fast. Work with an agency. The up-front cost of outsourced work will eventually be less costly than trying to do it all yourself.

Patrick Woods, director of customer success at Keen IO, notes the challenges of working with an agency. To overcome these hurdles, he suggests:

1. Build a relationship with the agency: Take time to get to know the people you’ll be working with. Determine fit as well as expectations.
2. Communicate: As start-ups tend to move fast, converse regularly and clearly with the agency to ensure you’re on the same page.
3. Understand what the agency can do for you: Elucidate its staffers’ core strengths and competencies. Establish what tasks you’d like them to take over and which you want to handle in-house.

Beware of Negativity

Lack of enthusiasm can poison the waters of your entire company. On the other hand, being confident will instill a sense of confidence in your employees. They will follow you more eagerly. Best-selling author and keynote speaker Jon Gordon has pointed out that negativity can affect your team’s morale, presentation, and output. Negativity can also lead to decreased energy and increased stress. When creating a positive work environment, the responsibility lies with the leader. You need to set the tone for your team to draw the best out of them.

Avoid Burnout

James Schramko of SuperFastBusiness is an advocate for getting more rest and sleep. Schramko points out that good rest can help you boost your performance. The cost of losing sleep is important and can include depression, a weaker immune system, memory issues, obesity, and more. The cost of burnout can be particularly high if you make yourself incapable of working for an extended period. Consider the costs before letting yourself get to that point.

Prioritize

You will only be able to do some of it. No one has more than twenty-four hours in their day, and we are all very busy. Derek Sivers, the founder of CD Baby, has said that he lives by the “Hell, yeah!” or “No” philosophy. He explains that saying no to most things leaves room in your life for the few things that get you genuinely excited. If you find yourself wavering between a “yes” and a “no,” he suggests choosing “no.” Only say “yes” to opportunities that you cannot pass up.

Conclusion

Transitioning from a start-up to an established business can take time. Take your time with the process. When all the right pieces are in place, you can shift easily from one stage to another. If you try to force the issue, you may have more troubles than you bargained for.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Restaurants have two primary costs that make up their total prime cost – labor and food. In seasonal adjustments in restaurants, it is essential to control the prime costs to survive the sales plunge. During the off-season, sales tend to experience a slump, which leads to rising labor costs. It is because, despite lower sales, labor has to be paid (fixed cost incurred regardless of the number of units sold) and incorporated in the bookkeeping process, no matter what.

Moreover, prime costs comprise approximately 55-65 percent of the restaurant’s total cost. Regression adjustments will require a stringent cost-control drill for all restaurant businesses. Five ways to control costs during seasonal restaurant adjustments have been discussed in the following paragraphs.

Adjust Labor Budget

As mentioned in the preceding paragraph, labor costs tend to shoot off-season due to lower sales. You can control costs by making adjustments to the labor budget. When setting and allocating budgets for the restaurant, the labor budget for off-seasons must be higher and vice-versa. This ensures that the prime costs are managed during seasonal adjustments, where sales fluctuate drastically.

Multiple Suppliers

Having multiple suppliers is a good idea for several reasons. For instance, in case of supply shortages from any of the suppliers, the alternative may always be available for backup support. This is crucial for restaurant businesses as raw material supply tends to oscillate during seasonal adjustments for the restaurant industry. 

Moreover, suppliers may transfer the cost of crops onto the restaurant if they face a poor crop harvest. Switching the raw material supply under such circumstances will likely induce cost control for a restaurant business. Moreover, having multiple suppliers will help save unnecessary hikes in the Cost of Goods Sold (COGS) during restaurant seasonal adjustments. 

Menu Adjustments

Another go-to tip to control costs during seasonal changes for a restaurant business is to make adjustments to the menu. Mixing and matching food items to incorporate the most popular and profitable items into the menu can lower food costs. Ensure that all items on the menu have high-profit margins. Items that are neither popular nor have higher margins will be eliminated from the menu as soon as possible.

Not just food costs but labor costs may also be reduced by making changes to the menu. For instance, more workers must prepare a burger than those required to prepare a steak. It means that menu items can be swapped during restaurant seasonal adjustments depending on labor requirements to control labor costs.

Inventory Management

Keeping inventory estimates is necessary to ensure cost control during seasonal adjustments in restaurants. It would help if you estimated how much inventory will be maintained for the off-season and the on-season demand. Inventory orders must be placed based on these estimated figures. 
This type of inventory management is essential if wastage is to be reduced, leading to lower food costs. As for peak seasons, ample quantities should be available in stock to meet higher than ever in restaurants. Therefore, premium prices for raw materials may effectively be avoided.

Reduce Wastage

Lastly, restaurant businesses must ensure wastage control as this will eventually control costs (food costs). In an attempt to ensure perfection in food, a lot of wastage takes place within restaurant kitchens. This must be reduced to avoid wastage because wasted food is costly.

If wastage is prevalent in a restaurant, more raw materials are being ordered. This additional cost may be saved, especially during restaurant season adjustments when inventory management estimates are in place. A wastage sheet or a food wastage log must be maintained to cater to this issue.

Conclusion

In conclusion, managing prime costs, mainly labor and food, is imperative for restaurant survival amid seasonal fluctuations. With labor adjustments, diversified suppliers, strategic menu changes, meticulous inventory management, and stringent wastage control, restaurants can navigate seasonal challenges, ensuring financial resilience and sustained profitability.

The commitment to cost control measures becomes even more crucial, given that prime costs constitute a significant portion of a restaurant’s total expenses. By implementing these strategies, businesses can fortify their resilience and successfully weather the dynamic shifts inherent in the restaurant industry during seasonal adjustments.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

What is the Utilization Ratio?

The utilization rate is an essential ratio companies can use to charge their clients. The ratios are used to maximize the productivity time for employees. It can reflect the billing effectiveness and the company’s overall productivity. Two different bookkeeping methods exist for calculating indirect and direct labor expense utilization ratios.

Method One

The first method calculates the total billable hours divided by the number of hours recorded in a particular period. For example, if the total hours are 60 but the hours billable are 30, then the utilization rate would be 30/60 = 50%. Using this utilization ratio, if the company is willing to cease recording its non-billable time, the ratio will always be equal to 100%. Easy enough?

Method Two

The second method for calculating the labor utilization rate uses the total billable hours divided by a fixed number of hours each week. An example will help elaborate and explain this formula. If there are 22 billable hours recorded in a predetermined 40 hours per week, then the utilization ratio will be calculated as 22/40 = 55%.

Why are Labor Utilization Ratios Important?

Company leaders rely on utilization ratios to significantly identify how much the company’s workforce is currently employed and productive. It provides how the current workforce is performing and the required performance from current employees. If the ratio indicates an overproduction, the company must hire more people to improve and balance productivity based on utilization rates.

Direct Labor Utilization

A company’s payroll is considered the most significant organizational expense. Companies want to make sure that their payroll costs are generating sufficient income. The direct labor utilization ratio indicates how much a company spends each year on direct labor.

The remainder of payroll-associated costs are considered indirect labor costs. Examples of indirect labor costs are:

• Amount spent on training employees
• Administrative expenses
• Marketing expenses
• Paid vacations
• Taxes

How to Calculate Direct Labor Utilization Ratio

The calculation needed for the direct labor utilization ratio includes dividing the total payroll amount associated with direct labor by the total payroll cost for that specific period, giving the direct utilization ratio. For example, suppose your company is spending $4,000 on the payroll for a specific pay period and pays an additional $3,000 in direct labor expenses. In that case, the utilization ratio for direct labor is 75%. (3,000/4,000 = 75%)

On average, the direct labor utilization ratio must be around 65%. A value higher than 65% will indicate that the company is utilizing its labor force efficiently. Companies with fewer paid vacations and paid training will have a lower utilization cost.

Indirect Labor Utilization

Overhead costs are also called indirect labor costs. Labor overhead costs are directly associated with the different materials used for direct labor. Calculating indirect labor utilization is different, and here’s what we need:

• The number of hours an employee has worked: if the employee worked for 52 weeks per year * 40 hours per week, they worked for almost 2,080 hours.
• Deduct the total time spent on holidays per year: 45 days or 360 hours (including sick leaves, public holidays, training, and seminars) 360 – 2,080 =1,720 hours.

Hence, the 1,720 hours are our total hours spent by one employee as indirect labor utilization.

Conclusion

Labor costs can be costly for any business, so the calculations of labor costs are essential to ensure that the company’s accounting is accurate. Calculating labor costs through these methods will ensure your company has accurate accounting and bookkeeping information. A good accountant or bookkeeper can accurately calculate labor costs if you hire a professional to assist with accounting issues.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.