Business owners: Charting a roadmap for success in 2017
Now is the time to revisit business goals set at the beginning of the year
We are almost halfway through 2017, which means it is an opportune time to revisit business goals set at the beginning of the year. Conducting a mid-year check-in allows owners and executives to evaluate if goals for the year are being met as projected and whether plans need to be adapted to help optimize future success.
Several questions business owners should ask include:
Is the business prepared for rising interest rates?
Rising interest rates and Federal Reserve sentiment are in the news regularly, with the public continuing to watch rates gradually rise after years of stagnation. With the country steadily rebounding from the recession, the Federal Reserve increased the interest rate for the second time in three months in March 2017 to a range between 0.75 percent and 1 percent (most recently they elected to maintain this rate in early May).
Interest rates are important to business owners to consider as they look at items such as loan terms and evaluating leasing versus purchasing for commercial real estate.
Is refinancing a business option?
As rates fluctuate, it is critical to evaluate refinancing options. This could be the time to consolidate debt or secure a better rate for a loan. Refinancing could open the door for a larger purchase later in the year or allow for a different goal to be reached more quickly.
Additionally, refinancing into a fixed rate loan may provide some peace of mind for business owners who are nervous about the impact of rising rates on an existing variable rate loan. A fixed rate offers something that business owners crave – predictability.
Do you have the right product for your needs?
It is also important for business owners to ensure they understand all the aspects of the loan. Take time to research the terms and make sure they are still in line with business goals. There are several financing options available to businesses, and it might be time to explore a different product that better suits the needs of the business or the current business environment.
Make a list of business goals, and discuss these options with an experienced banker, as they should be able to help clients prepare and best navigate any economic environment with sound lending advice.
Is it time to make a large purchase?
Mid-year is the perfect time to evaluate what is needed to help business owners navigate the rest of 2017. Because interest rates are unpredictable and have been on the rise, it is important to understand how a purchase now will impact the business down the road. For example, it might be worth considering owning instead of renting equipment or property.
Real estate is also a key consideration for business owners, as it is often one of the largest expenses they face. Purchasing a space instead of renting could be a better long-term solution, given rents in many cities continue to rise at a pace that makes long-term agreements a less attractive option.
Ultimately, the window for low rates seems to be closing, so moving to a more entrepreneurial mindset and investing through capital expenditures may be beneficial. Bankers can help owners evaluate these options for the short- and long-term.
Be in regular communication with your banker.
Finally, it is critical to maintain regular communication with your banker. Business owners should consistently share what is happening and ask the tough questions to see what changes can be made to prepare for what’s ahead.
Bankers are there to support owners and to help businesses succeed — having the full picture will result in sound advice and recommendations.