In 2014, you should focus on building out the bench of experts you rely on.
As a new business’s resources are often scarce and quickly allocated, you should shop around for low- or no-cost offers for small businesses. Some lawyers, CPAs and bankers offer free or affordable consultations and evaluations to help small business owners get started. The right kind of professional will support you in your business’s growth.
Growth/investment phase resolution: Don’t make do, invest
To keep a growing business on track, you’ll need to make the right investments in facilities, equipment and inventory. It seems simple, but many maintain shoestring budgets even after they achieve profitability. Whether it is aging equipment, a new location or staffing demands, make a New Year’s resolution to create a plan for investing in what your company needs.
In 2014, identify opportunities for growth and take action to achieve it.
This resolution requires a clear knowledge of your financial capabilities. It could be a time to spend surplus cash or it could be time to explore various lending options. Commercial loans for major expenses can be structured with flexible terms and competitive pricing, keeping payments in line with cash flow. Find a commercial banker who understands your business objectives to navigate all the options available. And whatever stage your company is at, discuss fraud detection services with your banker as electronic fraud is becoming more prevalent.
Managing/maintaining phase: Make a multi-year resolution
Once business is progressing, it takes even more organization to maintain momentum and strategize for future developments. Established companies often require a longer timeline to successfully implement important company changes to sustain continued growth.
In 2014, set concrete business goals for 2016, 2017 and beyond.
After setting these goals, work with your banker to create a path for achieving the financial stability and resources to fulfill those needs. If you anticipate replacing or upgrading equipment in five years, for instance, consider short-term investments to grow your available capital. Or, establish a Certificate of Deposit to ensure the funds, which are FDIC insured, will be available when needed. You may even find that loan products, such as an SBA loan, can help bridge a gap in your financing.
Transition phase: Plan for the next challenge
After growing and sustaining a business over the years, the day will come when it is time to move on. Whether planning to enter retirement, transfer the business to the next generation or prepare for a third-party sale, this transition requires careful planning and consideration. Preparing for this moment should happen well before ‘point of sale,’ but too many business owners wait for the opportunity to arrive before answering the tough questions.
In 2014, identify the exit strategy you would like to achieve, even if that transition or exit is years in the future.
Circumstances may change these plans, but having a plan in place will help your business stay on track while continuing to build its value. Regardless of the transition or exit strategy, all potential new owners are looking to invest in a growing company that is on sound financial footing.
Best of luck achieving all of your goals in 2014 and beyond!
Carol Mangan has been Sterling Bank’s Oregon and Southwest Washington market president since 2012. Mangan joined Sterling in 2001 as a corporate banker in Portland. She can be reached at email@example.com.