Investing for Business Growth
- Business growth can be like climbing a mountain. Preparation is critical.
- You must objectively assess your business before investing in growth.
- The right time to grow your business depends on several factors.
Q & A with Hope Reyes, Business Banking Relationship Manager, KeyBank
Q: How would you describe business growth?
Reyes: Business growth can be compared to climbing a mountain. Without hiking to the top, there is little gain and no reward (the views!). To reap maximum benefit of your business investment, consider the following actions to prepare, as you would for a mountain adventure:
- Know the climate and set an objective. Your plan must be timely, and you must be committed to reaching the top!
- Gather the right equipment, tools and resources and be prepared for setbacks – blisters, weather changes, unexpected disruptors.
- Sweat equity pays off.
- Patience is critical. Hold steady in your vision and transformation will happen along the journey. All good things take time and planning. Take one step at a time.
- When the benefits of business growth are visible, celebrate that your business is stronger and you’ve opened your eyes to a sky of opportunities that lie ahead!
Q: How do I know when it is time to invest in my business for growth?
Reyes: One thing the pandemic taught us is the necessity to be hyperaware of the economic climate and to be willing and able to pivot in a moment’s notice.
The first step in growth readiness is to conduct an objective check-in on your business. Consider the following: Is there a demand for my product or service now? This could be a physical demand, or a demand that is driven by a change in circumstances. In this case, growth can mean developing a more robust product or service offering in advance of your competitors or responding to the need in the market based on trends.
Business owners may shy away from investing in new equipment or process improvement because the expense can be costly. However, this investment can springboard your business to the next level. In addition, customers often interpret changes like this as a sign of relevance and keeping up with the demands of a market or community.
Conversely, complacency of a business model can lead to lackluster long-term growth. This presents an opportunity for a competitor to outshine the business you’ve worked so hard to grow. If you haven’t stepped out of your comfort zone to try something new or make adjustments, then now may be the time.
If you are assessing the right time for growth, then also consider the following while objectively evaluating your business:
- Is there an opportunity being presented now that is too good to pass up (e.g., possibly a price reduction on equipment or software)?
- Is your business feeling stagnant? How will an investment change your business for the better? Your answer should set a benchmark for gauging success when the investment is put into motion.
- Are you prepared for the personal commitment (time, sweat equity, etc.) necessary to make improvements to your business?
Q: What are the different ways to grow my business and how do I know what is right for me? (e.g., market penetration, market development and alternative channels, such as ecommerce, new product introductions, acquisitions, diversification, etc.)
Reyes: When you think about growing your business, there are a variety of ways you can do so; but you can start by asking yourself a few questions:
- Are you looking to broaden your client base?
- Do you want to grow your presence in either physical stature/size or through alternate channels like ecommerce?
Any of the above actions start with conducting a needs assessment and creating a plan that details, among other items, your financial plan for growth. The plan should also include the sweat equity and time commitment you will make to realize your goals.
When the time is right, people must know about the changes you’ve made. Capitalizing on social media, networking and community engagement are important areas of focus when communicating plans and changes, and helping these changes be visible to your audience.
Q: Who at a financial institution like KeyBank can help me figure out my growth strategy?
Reyes: KeyBank has been committed to the growth and longevity of business clients for decades. This includes a focus on Women-Owned Businesses through the Key4Women® program. Our business banking professionals and Key4Women certified advisors consult and strategize with business owners to ensure they are positioned to meet their business goals. KeyBank experts are ready to help in a wide variety of areas – from cash management and foreign exchange to wealth management and succession planning. From Key’s perspective, your business is our business – and we lead with passion and dedication when it comes to understanding your business needs.
Q: How would I prepare for meeting with a KeyBank business expert?
Reyes: We most likely have experts in your community. Use our KeyBank branch locator to find and contact your local Key branch. Ask to speak with a business banking expert or a Key4Women certified adviser. Come prepared with your business history, your goals and immediate needs, and be ready to discuss the financial aspects of your business. Open and honest conversation is critical so we can best guide and partner with you to build a plan that meets your needs.
Q: Are there other ways I can invest in my business?
Reyes: The most successful businesses I’ve worked with are those that have a strong Certified Public Accountant (CPA) to help them understand their finances, as well as a strong banker who has a seat at the table regarding future growth and needs.
In addition, owners also benefit from partnering with a committed business mentor who keeps financial and growth discussions objective. KeyBank’s Key4Women program helps connect women business owners with certified advisors and provides impactful networking, coaching and mentoring opportunities to all women-owned businesses in our communities. At KeyBank, we have access to internal tools that help us identify and understand specific industry trends impacting verticals from bakery shops to trucking and logistics. We take pride in helping provide the most up-to-date, relevant data to our business owners to help them stay ahead of the curve.
Q: What are the ways I can fund the growth of my business?
Reyes: A sit-down meeting with your banker is always the first step. Having said that, outside of the minimum 4-6 months of liquid cash reserves needed to support your business through a downturn, all other reserves should be considered investment resources.
If business credit has not been established at your financial institution, then now is the time; this could be as simple as overdraft protection or a credit card for incidentals. It became apparent during the pandemic that many businesses without reserve credit lines reevaluated having accessible funds available through their financial institution to protect them in unexpected situations.
Depending on the scope of the project and company financials, KeyBank routinely partners with the Small Business Administration (SBA) to offer a variety of resources to acquire capital or help with expansion, and the Small Business Development Center has a variety of unconventional resources available to help with funding your next big move as well!
My biggest piece of advice is to start the funding conversations early and always keep your financials up to date. Best of luck on your journey!
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