Small retailers often find it challenging to compete and thrive in markets driven by big stores and retail chains. However, with the right strategies and a focused effort, small retailers can carve out a niche and strongly compete with larger stores. Here are some key strategies that can help small retailers compete successfully in a crowded marketplace.
Embrace Personalized Customer Service
A significant advantage that small retailers have over larger stores is their ability to provide consistent personalized customer service. By fostering a welcoming atmosphere, small retailers can build strong relationships with their customers and tailor their offerings to meet customers’ unique needs and preferences. Independent retailers should strive to greet customers by name, remember their previous purchases, and offer product recommendations. To help with this, consider implementing point-of-sale software with built-in customer management tools. Additionally, retailers can also consider offering multiple services to address client needs, such as free gift wrapping, personal shopping assistance, and customization options. By going the extra mile to meet customer needs, small retailers can differentiate themselves and create a loyal customer base.
Curate Unique and Niche Product Selections
Larger stores may be able to offer a wider range of products, but small retailers can compete by curating unique and niche products that might be challenging to find in large retailers. By carefully selecting products that align with their target market’s interest and preferences, small retailers can offer something different and exclusive, establishing themselves as a go-to destination for customers seeking these harder-to-find items. To be successful at this, small retailers should continuously have conversations with customers about the lates trends, and update their product offerings in order to stay ahead of the competition.
Focus on Local Community and Connections
Small retailers can build a strong local community presence. They are in a unique position to build connection with their communities by partnering with local organizations, sponsoring community events such as sports leagues and charity events, and collaborating with other small businesses to promote each other and create a sense of unity. Actively engaging in the local community allows small retailers to enhance their brand visibility and create a positive reputation as a trusted and credible local retailer.
Embrace Technology
Small retailers don’t typically have the same financial resources as larger stores, but they should still consider reaching a broader audience with a strong online presence. Setting up an online store and promoting products through social media platforms can help small retailers attract customers who prefer the convenience of online shopping. Additionally, small retailers should utilize customer relationship management (CRM) software to help analyze customer data, personalize marketing efforts, and establish long-term customer loyalty.
The passage of the Secure Act 2.0 in December of 2022 pushed back Required Minimum Distribution (RMDs) from age 72 to age 73 in 2023 (and age 75 in 2033). While proponents of this move argue that it provides advantages, such as allowing individuals more time to accumulate wealth in their retirement accounts, others warn that it could be a tax trap. Below we explore the potential pitfalls and drawbacks of this delay.
More Income Tax and Higher Medicare Premiums
While proponents argue that individuals will have more time to accumulate wealth in their retirement accounts without being required to withdraw a specific amount each year, it’s important to remember that RMDs are subject to income tax. By delaying the distributions, you risk ending up with significantly larger distributions in the future, resulting in higher tax liabilities when you eventually begin taking withdrawals. This could potentially push you into a higher tax bracket, increasing your overall tax burden and possibly negatively impacting what you pay for your Medicare premium as this is always based on your taxable income from two years prior.
Higher Tax on Social Security Benefits
If you have taxable income as well as Social Security benefits, such as your RMD, that can affect how much your Social Security benefit is taxed. If your adjusted gross income is more than $25,000 for single filers ($32,000 for joint filers), your Social Security payments can be taxable. If an eventual RMD will trigger that tax, an earlier withdrawal from your account may be the better move.
Consequences for Beneficiaries
Delaying RMDs could have unintended consequences for beneficiaries of inherited retirement accounts. Under current rules, non-spouse beneficiaries must withdraw the funds within ten years of the account owner’s death. This means that heirs who inherit the deceased owner’s account must distribute the entire account in 10 years. If those heirs are in their prime working years, they could likely pay a federal tax rate of 24% to 37%, plus another 3% to 12% in state income taxes. And the distributions could push their “other income” above the income thresholds ($200,000 for single filers and $250,000 for joint filers). By delaying RMDs, you could be dumping a hefty tax bill on your heirs.
Last year the Federal Reserve began raising interest rates at a pace not seen since inflation soared this high 40 years ago. By raising interest rates, borrowing becomes more expensive for individuals and businesses, which can lead to reduced spending and investment. This, in turn, can help slow down inflationary pressures. The Fed recently approved its 10th interest rate increase in the effort to curb inflation, but are these hikes working? We discuss below.
A Subtle Hint
Will this be the Fed’s last rate hike for a while, or will the central bankers raise rates yet again at their June meeting? The Fed issued a recent statement in which they dropped a line that was previously used about the likely need for additional rate increases, which has caused some to speculate that the Fed may be pausing rate hikes. Given signs of a softening job market and slower economic growth, as well as brewing turmoil in the banking sector, an assessment to pause rate increases isn’t far-fetched.
Have the Rate Increases Been Successful?
The Fed raised rates at ten consecutive meetings, pushing its benchmark rate to between 5 and 5.25%, and the increases have shown some markers of success. Inflation showed signs of easing at the end of 2022 and the beginning of 2023. And after a strong January, consumer spending slowed sharply in February and March. However, it’s still more than twice as high as the central bank’s target of 2%. After the May 2023 meeting, Fed Chair Jerome Powell told reporters, “We remain strongly committed to bringing inflation back down to our 2% goal.” He added that this will take time, and the Fed is prepared for the possibility of additional rate hikes if such a move is warranted. However, some experts warn that attempting to hammer away at inflation by further increasing rates could put more jobs in jeopardy, without necessarily having a great impact on inflation.
According to the Social Security Administration, the last 12 Trustees Reports, which report annually on the current and projected financial status of the Social Security program, indicated that reserves will be drained between 2033 and 2035. If that happens, scheduled tax revenues will be adequate to pay only about three-fourths of the scheduled benefits. Here are some of the legislative measures that policymakers have proposed to address the issue.
Raise the Retirement Age
One proposal is to gradually increase the retirement age. Currently, the retirement age is set at 67 for those born in 1960 or later. The proposal would increase the retirement age to 68 over the next decade, and eventually to 70 for people born in 1978 or later. Proponents of the increase claim that it would reflect longer life expectancies and help to ensure the program’s long-term sustainability. Critics of the increase argue that this would disproportionately affect low-income and blue-collar workers who have physically demanding jobs and may not be able to stay in the workforce as long.
Increase Payroll Tax Rate
The payroll tax rate funds Social Security. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $160,200 (the self-employed pay 12.4 percent). Under this proposal, the tax rate would gradually increase over the next decade, thereby garnering more revenue for the program. Advocates of this approach assert that it would be a fair way to fund the program, as it would require higher earners to pay more into the system. However, those against this move argue that it could discourage economic growth.
Invest in Private-Sector Stocks and Bonds
Social Security funds are invested in special-issue government bonds, and these bonds have a lower rate of return than stocks or other investments. Proponents of this move argue that investing Social Security funds in a diversified portfolio of stocks and bonds could potentially earn higher returns and increase the program’s financial sustainability. Critics point out the obvious risks and market volatility associated with investing in the stock market.
Change the Way Benefits Are Calculated
Social Security Benefits are based on a worker’s highest 35 years of earnings, adjusted for inflation. One proposal is to implement a formula that is less generous to higher earners. While this could address Social Security’s regressive aspects, where higher earners receive more benefits than lower earners, critics argue that this could disincentivize workers to increase their earnings and could dissuade entrepreneurship.
Invest in Private IRAs and Savings Accounts
Finally, some lawmakers have recommended creating individual retirement accounts (IRAs) or other private savings accounts as alternatives to Social Security, allowing individuals to invest a portion of their earnings in the stock market or other investments. While this would grant individuals more control over their retirement savings, and could potentially earn higher returns than the Social Security system, critics point out that private accounts expose individuals to market volatility, and that the Social Security program provides a safety net for individuals who may not have the means or knowledge to invest in private accounts.
Healthcare practices rely on prompt payment for provided services to maintain financial health of their business. Point of service collections refer to the process of collecting credit card or cash payments at the time of service, rather than going through a billing cycle, which can take months. Below we’ll go over some of the ways that healthcare practices can use point of service collections efficiently in order to cut the billing cycle, improve cash flow, and get paid more quickly while providing a positive experience for patients.
Train Staff to Discuss Payment Options in a Way That is Polite and Professional
Staff members who interact with patients should be trained to discuss payment options and expectations in a polite and professional manner. They should be prepared to explain services as they relate to a patient’s bill and answer any questions the patient may have about the billing process. This helps the patient feel comfortable paying their bills without confusion, surprise, or frustration regarding the cost of care. Transparency and approachability also help to build positive relationships with patients.
Offer Multiple Payment Options
Accepting multiple forms of payment increases your chances of receiving payment more promptly. Offering flexibility with methods of payment, including credit cards, checks, debit cards, cash, and virtual payments like Apple and Google Pay makes payment more convenient for patients. You can also consider offering payment plans or financing options for patients who cannot afford to pay in full at the time of service. Offering payment options that fit a patient’s financial situation can help ensure timely payment and build trust with patients.
Be Proactive and Transparent About Payment Expectations
By providing pricing transparency and establishing financial responsibilities, you help to create a more successful patient/provider relationship. This information can be provided over the phone, during the appointment scheduling process, or through the practice’s website. Staff should be prepared to provide a price estimate upfront, discuss the various payment options available to patients, and emphasize that point-of-service payment is preferred.
Use Technology to Streamline Payments
Medical billing software with an integrated payment processing platform that allows for point of service payments is essential in collecting up-front payments from patients. Look for one that offers point of service collections as a default. You could also implement a patient portal where patients can view and pay their bills online. This will help streamline point of service collections, reduce administrative burdens, and improve collection rates.
