A new year means setting new business goals and capitalizing on exciting opportunities that could help take a business to the next level.
“Business owners have a chance to evaluate where their business is, how they want to grow it and then put a plan together to achieve their objectives,” says Michael Lamping, Columbus market president, First Federal Lakewood. “But before they can execute, it’s important to establish a plan to attack the market in the coming year and, just as importantly, to re-evaluate and adjust that plan when circumstances inevitably change.”
Business owners who put together a plan, execute that plan and find ways to work successfully with partners should be able to leverage favorable market conditions to grow their business.
Smart Business spoke with Lamping about the steps business leaders can take to get started, as well as the importance of getting the input of key business partners to inform strategic decisions.
What financing opportunities should business owners consider and potentially act on in 2022?
When exploring financing opportunities for this coming year, there are two areas business owners may want to consider: their current cash position and how they utilize debt.
Businesses should look at their cash position and how it sets them up for future growth, and keep in mind that it’s possible to fund growth via loans or lines of credit instead of cash. If a company is cash positive at the moment, it is a good time to talk with a banker about tapping into a working line of credit.
However, depending on the economy and if debt remains inexpensive, it may be a good time to fund a business expansion. That could be done through organic growth or through acquisitions.
When it comes to the latter, inexpensive debt can be used to help fund an acquisition. However, as of 2021, and even into 2022, the high company valuations might mean it will take buyers time to find the right opportunity at the right price.
What unique opportunities or conditions exist in the market, and how could they affect a business?
Many businesses are entering succession planning and ownership transition periods. This is mostly because baby boomers who are in leadership or ownership positions have reached an age where they are looking to transition, either through succession planning or through a sale. For these owners, now is a good time to really evaluate which path is best: a sale of the business or by growing and bringing on other team members to run the business in their place.
What conversations should business owners have with their bankers this year to get the most out of the coming year?
Business owners should talk with their banker about all that is happening, and what they would like to happen, with their business. The conversation should also include what their growth objectives are, what obstacles could stand in the way of their growth and how they might navigate those obstacles to achieve their goals.
It’s common for business owners to get so caught up in running the day-to-day operations of their business that they often struggle to take a bigger-picture look at the organization to better understand where it is and where it should be headed.
Taking some time to talk with a banker can create the opportunity to have an in-depth conversation about the strategic vision. Plus, it’s important to get an outside perspective on how they and their organization are currently set up to achieve that vision and build accountability into the plan. Through these sometimes difficult conversations, they’re more likely to achieve their goals.
Insights Banking is brought to you by First Federal Lakewood