By Emily Jameson, Business Bank Market Executive, Bank of America
The Long Beach business community has proven to be nimble and resilient over generations, and will continue to drive economic growth for the entire Southland region. With the current headwinds, it’s a good reminder to keep in mind that some decisions and “inflection points” can change the trajectory of your business and have a profound impact on the long-term success of your company and the legacy you leave. What are those inflection points for your business? Drawing on client insights and perspectives, we have identified a few key moments in time currently “in-play” for companies based in or with substantial operations in Long Beach:
Growth
While a company is growing, there are several considerations: hiring the right talent, expanding your operations and accessing additional capital. Talent: When growing your workforce, you’ll want to provide comprehensive benefits to help attract and retain the best talent. Forward looking companies are taking an integrated approach to help support employees’ broader needs, including financial wellness, saving and investing. Leasing: Whether it’s essential equipment or additional space for offices, warehouses or manufacturing, a business owner must weigh the risks and benefits of purchasing vs. leasing equipment and real estate. Some factors include cash on hand, risk mitigation, strength of balance sheet and tax implications. So, for example, if technology is changing rapidly in your industry, it may be advantageous to lease equipment and upgrade as needed. Asset-based loans: Businesses can borrow based on their own financial and physical assets, which can range from accounts receivables and inventory to equipment and real estate.
Fine Tuning Operations
Maintaining and expanding your business involves automating tasks, strengthening working capital and creating accountability to strengthen operational efficiency. Payments: Making and accepting payments are a lifeblood for business owners. Nearly eight in ten payment transactions globally are now contactless. As real-time payment methods are adopted, suppliers and companies will increasingly expect faster, more efficient payments. Working capital: The pandemic showed us how volatile our systems could be, especially in Long Beach with supply chain disruptions and labor shortages. Even well-capitalized companies are vulnerable to market changes. To strengthen their working capital and mitigate risk, companies should examine how to lower costs, evaluate weeks of float, identify new revenue streams and automate tasks to reduce manual work. Optimize existing technology: Many companies in Long Beach are optimizing existing technology without making significant investments. For example, manual tasks, like accounts payable, are being automated or streamlined. Mapping your strategy: Whether through international expansion, going public or M&A activity, the decision making process represents a critical inflection point for a company. When developing a growth strategy, it is crucial that business owners determine the effects on various stakeholders, including employees and partners. Digital transformation: Digital tools are rapidly supporting expansion, including systems that provide realtime and other payments across geographies, streamline cross-border compliance and protect businesses from fraud and cybercriminals across global jurisdictions.
Exit Strategies
In my role leading business banking for Long Beach, I help more and more clients with succession planning – and good succession planning involves deliberation over what is needed for the long-term success of a business. A comprehensive succession plan should include a roadmap for current and future leaders to assess opportunities and risks, earmark strategic investments, plan for disruption and position the company for sustainable growth. Before exiting, I advise business owners to assess whether they have a successor with the right skills and desire to take on their role. They should also determine if they want to sell the business, transfer it to a partner or family member, take it public or liquidation. Every moment can be an inflection point, a chance to move your business forward with the right strategy, planning and action. Assessing your business’s overall growth and direction regularly can create a valuable legacy in the years to come.
