3 reasons why small businesses need incentive programs

Photo by Andrea Piacquadio

Whether in the form of financial troubles or a lack of solid clientele or reach, which can increase your customer base, small businesses have a wide range of troubles that they need to cater to progress and make a name for themselves in the market.

Many professional businessmen and owners of well-established organizations say that most companies fail within the first two years because they are the hardest.

The business owner and the employees of a growing company have to sacrifice a lot due to a lack of employee benefits such as medical insurance.

However, one motivation many small businesses consider wasteful and unnecessary is the concept of incentives. Still, the idea of offering small business employee incentive programs can be a fruitful investment in its own right.

Let us discuss this in more detail, highlighting three important reasons why small businesses should integrate incentive programs.

Why incentives are a valuable asset

1. A clever investment

When considering employee incentives, business owners should think above just considering it as a company expenditure which can result in financial loss if not handled properly.

Although finances are very tight for any small business, incentives can be used as a bargaining chip that can be utilized in a variety of different ways.

There may be instances where you might have evaluated and found a prodigy in the industry, someone you think is a real diamond in the rough. However, many other companies might be much more established in the market, offering an increased salary.

This is where your incentives could act as an additional chip on the metaphorical table, being able to be used to win the prized applicant over without needing to further increase their pay. 

Many surveys centered on incentives and benefits have shown that around 70% of companies offer many benefits in the form of packages, including various bonuses and other fringe benefits to take advantage of.

Understandably, small companies might not have the liberty to propose commissions and financial-related bonuses, but there are other approaches to this as well.

One other way other than commission-based bonuses is to offer their employees proper insurance coverage and many other employee rewards and tokens of employee appreciation.

There are many examples of this that many small businesses tend to adopt, which include a monthly lucky draw for a chance to win a valuable piece of technology or some concert tickets.

In addition, many other companies offer much more creative benefits, an example being certain companies that include shares and a bonus in the long run.

2. Think about the big picture

As a business owner, you might not be offering any sort of incentives or employee appreciation bonuses due to the losses which might be showing up on their monthly sales report due to offering them.

However, rather than monitoring the short-term losses in capital, you should think of the bigger picture and think of the long-term benefits instead. Not only does offering incentives lead to better applicants applying for a job, but it also results in better productivity.

Offering various benefits and bonuses to work up to offers employees encouragement and motivates them to meet the criteria to achieve them.

In addition, incentive programs also result in a better, more uplifting atmosphere. These achievements may not seem significant, but they positively impact the employees, as they feel a sense of accomplishment, enabling them to perform better at work to keep up that level of work.

3. They can influence buyer behavior

In addition to influencing employee behavior, incentives can have certain benefits that are capable of influencing consumer behavior in a positive way, which can lead to increased sales and profits as well.

How it works is that certain businesses offer incentives that can act as rewards for the consumers, which can bring a positive shift to the overall buyer behavior.

Due to this, if the buyer knows that reaching a certain threshold or going past a certain spending limit can result in a reward, they would be naturally inclined to fulfill it. This increased spending could potentially result in overwhelmingly positive sales projections and profits.

Conclusion

Due to the increasing number of struggles that small businesses face every day, they often tend to forego other aspects, such as employee appreciation.

However, it is important to understand that recognizing an employee’s contribution to the company is extremely beneficial because it boosts their performance and a sense of accomplishment.