How your banker can help you expand your business

If your product is in high demand, you’ve retained a quality, dedicated team of employees and day-to-day operations are running as well as they could, business is probably booming. That means it might be time to take your business to the next level and consider expansion. To do that, you need to have the right people in your corner to help you get there — including your banker.
Smart Business spoke with Molly Gordon, a business banker with Northwest Bank, about how leveraging the right resources is key to your business’s success.
When a business is looking to expand, how does it get started?
When you’re planning an expansion, you should streamline your daily operations to free up resources that will be valuable during your expansion. Meet with your banker early in the process to review your operations and financial situation. Your banker will be able to evaluate your current position and make recommendations to help you prepare for future growth.
When preparing to expand to a new location, what should businesses consider?
Before looking at new locations or talking with a builder to plan new construction, determine what you can afford. If you’re not sure, consider your business goals. Do you want to expand your existing location to keep up with demand or attract new customers, or are you looking for a new location to house your growing operations?
When visiting potential locations, take a look at the surrounding area to see if your business makes sense there. If you want to open a boutique-style bistro, for example, it may not make sense to open in an area heavy in manufacturing facilities.
You’ll also need to decide if you want to rent or buy your space. Both options have benefits and downsides, so carefully consider your current needs and future plans before making this decision.
Other things to take into consideration include local taxes and potential building repairs, which could impact your overall costs. You should also check with your local and county governments for economic incentives aimed toward business owners. It helps to work with a financial partner who has experience lending in your geographic area and is familiar with your local market.
Remember, each market is different and someone who understands yours will have a better handle on the everyday circumstances that affect your business.
Moving or expanding takes capital. Your banker can answer questions about financing and help you determine what you can afford; help you understand all the variables, including your current situation and future goals; and structure a deal that works best for your business, whether it’s a conventional loan, line of credit or a Small Business Administration (SBA) loan with lower down payments and longer repayment terms.
How can a business stay on track during expansion?
Business doesn’t stop during times of expansion. Although you can become preoccupied looking at spaces, analyzing your balance sheet and developing strategies for growth, you’ve still got to meet customer demands, keep up with your industry and maintain a happy workforce.
You also must continue to pay your employees, ensure there’s enough inventory and that equipment is up to date and functioning. That means freeing up working capital by cutting back on expenses, selling excess products and meeting with your banker to talk about a loan or line of credit, which you can use to hire the right people, increase your inventory and replace or upgrade equipment.
Although you’re likely focused on your long-term growth strategies, day-to-day short-term goals are particularly important in ensuring you stay on track. You’ve got to keep your eye on the near future while envisioning what your business can be in the long-term.
The stronger your relationship with your financial partner, the better they get to know you and can look out for what’s best for business. Talk with a banker if you’re planning to grow. As your trusted adviser, they are as invested in your business’s success as you are, and will be more than willing to work with you to help it thrive.
Northwest Bank is Member FDIC. Equal Housing Lender.
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