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Published on April 29, 2020 | Webster Bank
As a small business owner, you balance the ability to quickly solve short-term problems while realizing long-term goals. That’s why we’d like to offer a new perspective on your goals for the coming year: Don’t plan for 12 months. Plan for 18.
You can see the immediate needs ahead for capital: that new piece of equipment, the new hire you want to make, or projected demands for increased inventory. But will you be positioned for the unexpected obstacles or opportunities?
First: If your planning only covers the growth you anticipate—and not the challenges you don’t—it may end up costing you more than you imagine. Small businesses often have to take on a patchwork of loans when dealing with situations case-by-case. That’s inefficient.
And second: When your financial partner has a deep understanding of your operations and a holistic view of your plans, you can be better prepared for the good and the bad. You have an ally who can keep you on track when matters of urgency strike.
That’s why we encourage small business owners to think in terms of an 18-month planning cycle. It can help you prepare the capital cushion you may need for whatever comes your way. A longer-range planning session with your financial partner is also a great opportunity to learn about lending options you may not know about.
Here’s a small business that encountered both bad times and good: Cathedral Art Metal, a retail manufacturer of inspirational gifts with a worldwide market. Their story underscores those two important lessons.
When an historic flood struck Providence, RI in 2010, it wiped out 85% of the company’s manufacturing operations. That meant open-ended downtime for more than 100 employees. Getting back in business fast was a matter of urgency—with a major need for capital.
Seven years later, the firm saw the chance to acquire another company—one move that could increase its business up to 40%. Once again, success called for readily available cash.
In both situations, company president Leo Tracey had the one asset crucial to a happy ending: a financial partner willing to step up.
“I feel better situated to go forward with this company, knowing that we have a partner like Webster behind us,” said Tracey. What if your business faced the same ups and downs? How prepared would you be?
Of course, every business will have day-to-day challenges. But that’s where having a proactive financial partner comes into play. A long-term partner with your big picture in mind will have a better handle on short-term solutions as well as ambitious goals. And taking a longer view gives you both the advantage of extra foresight, crucial for managing challenges and seizing opportunities.
When you look a little farther ahead, you can look forward to a stronger, more stable future.