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Your Path to Increased Profit: Take Care of Yourself First

Business owners who underpay themselves year after year are costing themselves in the long run.

Lots of business owners underpay or altogether forgo paying themselves in the interest of “investing” in their business and its needs. In the initial stages of a start-up or in tough times, one might have to make sacrifices, but doing so year after year points to a much bigger problem. To promote profitability, it may seem to make sense to habitually pay yourself less. In the long run, however, it will cost you and your business more than you might anticipate.

As the business takes off, it’s essential to start taking a decent salary for yourself and your partners. Whatever you pay yourself, it should be enough for you to live comfortably and allow you to save and invest for your future. Let the power of compounding work for you. If you own the building, make sure to charge the business a fair rent. You aren’t doing anybody any favors by hiding the actual expenses and giving yourself a false sense of profitability.

One of my consulting clients, let’s call him Steve, was in his 15th year in business but was paying himself barely enough to meet his household expenses. His wife also worked in his business. They hardly took any vacations or saved for their kids’ education or their own retirement. After I had a few meetings with him, he finally understood and realized the importance of taking care of themselves first. He gave his wife and himself a decent raise. They went on a family vacation that they thoroughly enjoyed, and came back rejuvenated with a new vigor. The following year, their business experienced a 10% growth in revenues and a 5% growth in profits.

Steve realized that he hadn’t performed at his best for several years. With the excessive number of hours he was putting into his business and the small return he was getting, he had lost the needed energy and motivation to think creatively and focus on profits. With the rotten mood he brough home at the end of the work day, his relationship with his family had also taken a hit. As a result of increased compensation, things were looking up. Not only could he pay for his immediate needs, but he could also sock away enough and invest for a comfortable life in his golden years.

How much should you pay? This question comes up all the time, and there is no one formula that fits all. It depends on variables such as type of business, legal structure, profitability percentage, tax bracket and others. Some possible solutions are:

  1. At least the pay needed to hire a manager to replace you in case you can’t work anymore
  2. Anywhere from 3% to 6% of your revenue
  3. A certain percentage of profits, leaving enough for reinvestment into the business, ensuring its continuous growth
  4. Enough to cover your necessary expenses plus maintain a rainy-day fund, among others

Family business dynamics. I have seen situations where the father, who has owned the business for years, hires children to management roles and pays them more than his own salary in order to “keep them motivated.” I find two issues with this situation. One, the children must earn their way up to management by proving their worth. Two, paying more than your own salary sends the wrong message of you being of less worth – it undermines your credibility as the leader.

Greed can kill the business. I have also seen the opposite happen. I knew an owner of a printing business who treated it as her ATM machine. She kept taking money out of her business to splurge on her luxurious lifestyle, including building a second house and taking multiple vacations a year. The number of employees went from seven to two. Sales kept shrinking. She lost most of her customers. The only reason she’s still in business is because of a contractual agreement with one large client.

You’re the one taking all the financial risks, having sleepless nights and making sacrifices; there’s nothing wrong with reaping the rewards. If you have managed your business with a focus on profits, you should not have to worry about finances after your exit – which, by the way, you get to decide, not your age, personal situation or circumstances.

The Bright Side: Company Helps Restore Coral Reefs

The company announced two new giveback programs for 2024, including a partnership with two organizations dedicated to saving coral reefs.

The Baltimore-based supplier has launched a new environmentally focused giveback program this year, donating a portion of all sales of its new Coral Reef towels.

Coral Reef Towel

Coral reefs are one of the most important ecosystems on the planet, supporting 25% of all marine species. They’re also a source of food for hundreds of millions of people; they power coastal economies through tourism, fishing and recreation; and they shelter coastlines from storms and erosion. However, due to factors including climate change and direct human impact, half of coral reefs around the world have been lost, and scientists have projected that more than 90% will have died by 2050.

One solution to the problem is to create high-tech coral farms that can grow coral up to 50 times faster and boost their resiliency against warming and acidifying oceans. Once the new coral is grown, the organization says it can plant it into degraded reefs to bring them back to life.

In addition to its coral reef giveback program, the supplier has announced that it will be donating a portion of all sales to the Melanoma Research Foundation.

These two new giveback programs build on the company’s established philanthropic practice of donating towels and blankets to the Salvation Army, particularly in areas suffering the effects of natural disasters.

4 Ways To Use Peach Fuzz, the 2024 Pantone Color of the Year

The pastel neutral is on trend for apparel, accessories and other promotional products.

Expect 2024 to bring warmth and comfort – at least in terms of color. Pantone has announced Peach Fuzz as its 2024 Color of the Year, describing it as a “clean peach tone with a vintage vibe.”

Pantone Peach Fuzz
The Pantone Color Institute says the subtle hue is meant to evoke a message of caring, collaboration and sharing.

“A cozy peach hue softly nestled between pink and orange, PANTONE 13-1023 Peach Fuzz brings belonging, inspires recalibration and is an opportunity for nurturing, conjuring up an air of calm, offering us a space to be, feel and heal, and to flourish from, whether spending time with others or taking the time to enjoy a moment by ourselves,” said Leatrice Eiseman, executive director of the Pantone Color Institute.

The 2024 color is a departure from the more saturated hues Pantone has chosen for other recent Colors of the Year like 2023’s Viva Magenta and 2022’s Very Peri. It’s similar, though, to the 2019 pick Living Coral. Pantone’s announcement also marks the 25th anniversary of the Color of the Year program, which was instituted in 1999, with the color Cerulean Blue.

Trend watchers say Pantone’s latest color of the year is a win. “It perfectly represents trends we’re seeing in the market now ... a rise in neutrals, emphasis in timelessness and attraction to the softness found in nature,”

Others also said, the color “is giving me all the summer sunset vibes” and is the “perfect neutral yet fun color” to complement a brand.

Peach Fuzz works well for athleisure and other apparel basics, lifestyle drinkware and various accessories. Consider these ideas for upcoming trends:

1. Beach apparel

peach fuzz tank top

2. Fitness

peach fuzz tumbler

3. Tropical Vacation

peach fuzz towel

4. Spirit Wear

peach fuzz hoodie

2023 Product of the Year - The Stanley Quencher

It’s a social media sensation, the next big thing in the drinkware boom – and the must-have status symbol of 2023.

Just before Thanksgiving 2023, a viral TikTok video showed the aftermath of a major car fire. In the center console among the destroyed seats, roof debris and water from firefighters’ hoses sat a bright orange tumbler with a handle and straw – blackened with soot, but otherwise unscathed. Miraculously, the ice inside was still intact.

stanley cup

The item was the popular 40-oz. Quencher H2.0 FlowState tumbler from Stanley. It certainly made a great ad for the company; the video garnered millions of views and tens of thousands of comments (many of them indicating they were soon to become first-time customers). Terence Reilly, president of Stanley, offered to replace both the tumbler and the car.

It was also an apt image of both Stanley and the Quencher’s remarkable recent success. Despite fears of a recession, slashed corporate budgets, cash-strapped households and a nearly saturated product category, this $50 tumbler became the must-have status symbol of 2023 in both retail and promo.

What’s even more remarkable is this unlikely resurgence is over a century in the making. Stanley, founded in 1913, was known for decades for its classic steel vacuum bottles and lunch boxes in its signature Hammertone Green, mostly used by the workers who first built the country’s infrastructure. The company’s items and its clientele were both suited to spend time outside in the elements.

That changed in late 2022, when a combination of brand flexibility, new executive faces, image retooling, earnest influencers, savvy affiliate marketing and swoon-worthy lifestyle shots – plus a bit of luck – launched the 40-oz. Quencher into the stratosphere. The tumbler is an object of adoration, lauded by millions of social media users and so worshipped that consumers this holiday season camped out in tents outside Starbucks locations to try to score the special-edition Stanley x Starbucks style, many with plans to resell them online for huge markups.

Get Comfortable With Cozy Cardio

The social media trend is ideally suited for end-buyers in the health and wellness space.

It can be hard to start a fitness routine, particularly for newbies and those who have had less-than-stellar workout experiences in the past. Now, say hello to ‘Cozy Cardio,’ a recent TikTok trend featuring a gentler, home-based way to work out.

The movement’s been popularized in recent months by TikTok creators, who started sharing their early morning workouts that often feature a lighted candle, iced coffee with protein, walking pad, comfortable clothes, and a streaming show in the background.

This is a great way to heal people’s relationship with exercise. It explores the boundaries of new and creative ways of moving your body to still be able to lose weight and feel good.

While health professionals say gentle walking should ideally lead to more intensive exercise over time for maximum benefit, it’s ideal for easing people into building fitness into their days.

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