By Berta Gabbard

With the new year well underway and a new administration in the White House, many business owners in the greater Tri-Cities area are looking to maintain their stride as we see how the markets respond and evolve. Several owners I work with are actively pursuing plans to grow or retool their companies.    

Whatever your goals and strategies for the year, I encourage you to prepare for the possibility of change affecting your company. Change is said to be constant, and I have to agree. As a business banker in our region for many years, I’ve seen how even positive changes such as a new opportunity can strain businesses of all sizes. The key is to be proactive, not reactive. Planning and organization can help you smooth out the bumps and ensure that your company not only survives, but also thrives.

Of course, without a crystal ball, you might be wondering how to prepare for changes you can’t foresee. Here are a couple of scenarios at seemingly opposite ends of the spectrum:

1. You gain a client that doubles your production, or

2. You lose your best and biggest client. 

Either situation presents potential challenges. The apparent dream-come-true of landing a significant new client could turn into a nightmare if your company cannot quickly size up and meet new demand. The inability to fill orders could turn an opportunity into a hardship and harm your company’s reputation. By the same token, businesses with few clients are smart to diversify and wise to have a plan in the event even one valued customer goes away. 

The solution in each scenario, and those in between, lies in your company’s ability to adapt in a timely, efficient manner. It’s important to be able to access and deploy the funds you need to turn on a dime or adjust during a downturn.  

Keys to business agility: 

1. Maintain access to current, relevant financial information.

2. Keep a handle on your company’s debt.

3. Have a plan to increase capacity to take on larger projects.

4. Improve cash flow.

Depending on the size and structure of your company, you may have specialists on your internal team to help you tackle each step. For guidance, I encourage you to reach out to a banker you know and trust to assist you along the way.

Business agility really comes down to knowing your numbers. In terms of financial information, being able to put together a timely profit and lost statement and balance sheet can help you internally measure profitability and improve company performance. These financial statements also are useful when talking with a banker about opportunities and risks, and determining your funding needs. 

By understanding your current debt, you’re in a better position to discuss options for paying it down and planning for increased capacity. Having debt is not a negative—it’s part of doing business as long as it’s in balance. Only by having a good grasp on your debt situation can you understand your capacity to borrow further if needed.

When it comes to cash flow, look to an experienced banker for an independent analysis. That’s essential to making improvements through options such as lengthening your payment cycles or pursuing trade discounts. It may be as straight forward as determining where you can delay payment or accelerate receipts in a pinch. Remember, your banker has a team of experts to draw upon in offering tailored solutions, from sweep accounts that help you leverage cash flow to interest rate swaps that can mitigate interest rate risk on long-term loans. 

I encourage you to take advantage of those resources—that’s the type of robust service you deserve. As you aim to improve your company’s resilience and adaptability, you should expect your financial experts to work hard every day to earn your business and help you succeed. 

[panel title="About Berta Gabbard:" style="info"]

Berta Gabbard is vice president and Tri-Cities Commercial Banking Center manager for Banner Bank. With nearly $10 billion in assets and more than 200 locations in five western states, Banner Bank partners with businesses and individuals to support their financial goals. You can reach Gabbard at 509-735-0815 or RGabbard@bannerbank.com.