How banks can help businesses achieve their goals

Through smart planning and a little luck, there comes a time in a company’s life cycle when it has the chance to aggressively grow. To pursue this growth, companies may look to add new and growing clients. They may add a production line to launch a new product or increase volume. Or they may acquire a business. Some companies may leverage the momentum to sell or transition the company to new owners.

“When companies are firing on all cylinders — when market opportunities and sound, creative strategies align — it’s a great time to be more aggressive in their pursuit of growth,” says Mike Toth, president of Westfield Bank.

Smart Business spoke with Toth about how banks can help businesses achieve their growth goals.

What supports do businesses need during periods of accelerated growth?

Companies looking to speed up their growth should spend time re-evaluating their client relationships and client makeup. It’s a good idea to look at the existing client base to ensure there is a higher percentage of growing businesses within their client portfolio. If they find they don’t have many clients that are growing, it’s highly recommended that the company seek out more clients that are in that mode.

Many companies are leveraging their bank’s relationships with accounting firms, attorneys and other service professionals as they pursue acquisitions — something not a lot of business owners have dealt with — to perform valuations and other due diligence processes.

Access to capital is another need, both short-term working capital and longer-term capital, to support fixed asset purchases and acquisitions that are critical to really take full advantage of a window of opportunity.

What, generally, tends to slow down business growth?

One barrier is access to talent. Some companies can find themselves in a market in which highly qualified candidates are hard to find, which creates competition for truly talented people.

It can also be difficult for companies to grow when they are unable to get the funding needed to take critical next steps, such as servicing a large new client or upgrading equipment. Companies that can’t access capital can find themselves with missed opportunities.

How are banks able to help businesses grow and overcome obstacles to growth?

In order to address those impediments to growth, businesses are well-served when they network and build relationships with their bank and other service partners. Companies should leverage their banker to make introductions to potential partners and, maybe counterintuitively, their competitors. It’s not unheard of for competitors to collaborate on certain projects when it’s mutually beneficial. And banks can bridge that gap.

Banks are also helping companies overcome obstacles in the market by providing capital and making independent insights — objective opinions that can give companies a new perspective on the market and their place in it.

A company’s banker can work with owners or executives to help them more accurately predict and plan for future capital needs. They can also identify potential pitfalls by leveraging not only their past experience, but the wisdom of other clients who found themselves in similar situations.

What are the best ways for businesses to create strong relationships with their banker?

Business owners can get the most out of their relationship with their banker by being transparent and communicating regularly. Business owners should be explicit about what they’re looking for from their banker. Some banks will host networking events, which are good places for business owners to make new connections.

An accomplished banker will get to know a business, and through that knowledge provide customized solutions to overcome obstacles and support the company’s goals. Banks want to see their clients thrive, and will find ways to be supportive, whether that means help with idea generation, networking and building relationships, or finding creative ways to build value.

Insights Banking & Finance is brought to you by Westfield Bank