What You Need to Know for Growth
Making informed decisions for your business means having a firm grasp on your business financials. Financial information helps you strategize for both short-term and long-term goals with ease. At Village Bank, we want to help you better understand each of the five financial stages of entrepreneurship to set you on the right course to achieve business goals.
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Startup Phase
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In the startup phase, your business is beginning to gain motion, and you are excited for the future ahead. During this phase, many business owners use their own credit cards and personal checking accounts to conduct business. This practice can get messy—fast. Business owners often forget to have their business pay them back, costing you money in the end. To avoid any losses, we suggest having dedicated business accounts and services to manage business finances. We also recommend opening a business credit card through a trusted banker so your business starts to establish business credit. Establishing a connection with a bank ready to help you build something special will reap benefits for you in the long-term future.
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Growth Phase
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At this point in your entrepreneurship journey, you may be thinking of buying a building or equipment to improve efficiency. There are many financing options that can help you obtain these resources. From SBA to conventional loans, a commercial banker can help identify the right options for you and create a financial strategy crafted to support your business growth and help you own it. Treasury Management tools can be especially helpful during this phase to optimize cash flow and manage cash online so you don’t have to spend valuable time at the bank.
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Acquisition or Expansion Phase
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Acquiring another business can help you gain an advantage or insights within your industry that are hard or time-consuming to replicate organically. It can also allow you to gain much needed technology, industry secrets, or assets to further the advantage your business has within the market. Buying a business takes capital and there are multiple ways of finding capital. We recommend having an established relationship with a Commercial Banker who puts relationships first before you need one. They can help determine the best strategy for acquiring an existing business and guide you through the financing process.
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Mature Phase
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You have put blood, sweat, and tears into making your business a success and it is showing. Your business has reached a mature phase and is prospering without much interference. Now isn’t the time to stay stagnant, however. Your market is not without competitors who are finding more and more ways to improve their own business. This is the time to hop on trends and continue earning your customers business as the world continues to change and modernize. This is the time you should be strategizing with your long-term banker to identify new ideas and help bring those ideas to life.
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Succession Phase
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You’ve decided that it’s time to hand the reins over to a successor. The person to continue on your business legacy may be a family member or a buyer that sees immense value in your business. Developing a succession plan is important to ensure that the business transition is handled seamlessly and easily. Reaching out to a financial advisor or commercial banker dedicated to doing the right thing can assist you in preparing your business for your successor. They may have connections looking for a business just like yours, or they may know of trouble spots to avoid in this succession. Having a seasoned professional in your corner can make a large difference in profit and time consumption.
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Next Steps Check-in
We have a few questions that may help you identify what your business strategy should look like for the next three, five, and ten years:
• Which phase do you currently feel like your business is in?
• Who are the key players that could help you get to the next business phase?
• Do you have a banker, accountant, or financial advisor ready to cheer you on and help you make plans for business growth? Can they help you reach your “there”?
If we can help you get to the next phase of your entrepreneurship journey, please reach out to a banker. We would love to be a part of your Village, connect with them today!
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