As a small business owner, you’re constantly dealing with immediate demands and day-to-day operations that can consume all your energy and distract you from your long-term goals. Putting out all those fires, however, often causes business owners to lose track of their long-term financial position and requirements. Have you taken the steps necessary to ensure that your lending strategy and plans align with and support your performance and growth targets for the company?
Plotting a lending roadmap is essential not only to achieve sustained growth, but also to ensure that you can meet your short-term lending needs. “You start at where you want to end up, and then plan your steps to get to that point,” says G. Scott Haislet, a CPA and tax attorney in Lafayette, California. To do that successfully, you’ll want to enlist the assistance of trusted advisors who can offer insights, challenge and test your assumptions, and provide an independent outside perspective on the lending component of your plans for small business growth.
Managing costs and maximizing assets
For example, they can help you to examine your current borrowing practices in the context of your long-term objectives. Could you do a better job of separating your business and personal credit histories and establishing a stronger credit record for your small business? What market opportunities might arise that could spark a growth spurt at your company, and in that scenario, would your current lending options be able to keep pace? Even if you don’t need access to a greater amount of financing today, what can you do now so you’re ready in advance when that need arises? Working with your accountant and financial services provider can help you determine the most accurate and profitable answers to those questions.
Similarly, they can work with you to optimize the use of your existing credit and financing resources. For example, if you’ve been planning to take out a loan for the purchase of equipment or vehicles, they can help you calculate whether it would be more productive to finance those through leasing. That would allow you to conserve your available or prospective credit for longer-term needs.
Moving from transactions to trust
To get this level of input, you need to nurture relationships that are advisory in nature, not merely transactional. “Find an accountant who’s willing to take an interest in not just the numbers or tax strategies in the business,” Haislet says. “You might have a relationship with an accountant who does financial statements for you, not just tax returns. The financial statement should have some value not just because the bank needs it for a loan covenant, but also as a management tool.”
Building these relationships with your accountant, financial services professional, and other advisors takes time, but the return on the investment can be significant. By incorporating independent perspectives and insights into your lending and growth plans, you position your company to make the most of its opportunities for long-term profitability, growth, and sustainable success.
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