Building Your Business

Whether you are just thinking about starting a business, or are already up and running, your business plan is an essential ingredient to your success. The business plan is where you lay out everything that you know about your business and why you believe your business will succeed. It will serve as a guideline for the formation and development of your business. It will help you to make decisions and to measure your successes or shortfalls along the way. It is also a document that lenders such as financial institutions or the Small Business Administration will use to determine whether to loan you money for your business. In short, no business should be without a business plan.

It’s all about building relationships. Recently, Mission Valley Bank’s Vice President and Business Banking Officer Paula Bahamon participated in a Women’s Collaborative Colloquium at CSU, Northridge with the purpose of elevating women business owners. Here is what the hosting organization, Women’s Collaborative Mentoring Program (WCMP), said about Paula --

“Paula Bahamon is an exceptional banker who understands how to support Women in Business. Last October, the WCMP held a Women’s Collaborative Colloquium at CSU, Northridge with the purpose to elevate women business owners. The Colloquium began with a leadership/mentoring award followed by industry expert panels and concluded with a speed mentoring (matchmaking). 

It's the new buzzword in business. The trend that has companies of all sizes looking at how they serve their customers — at every stage. It's called the customer experience or CX for short, and it provides a unique opportunity for companies to

differentiate themselves and build ROI. The customer experience isn't about a single interaction a customer has when they first purchase a product or service; it's about all the interactions or touch points they have with a company. It could be an experience at the point-of-sale, online, or even when they receive your invoice. Building relationships, loyalty, and revenue. The theory behind CX is simple: If companies can better understand what customers want, they can deliver it to them, thereby increasing customer satisfaction, retention, loyalty, and ultimately, revenue.

Article Compliments of Steve Brown – Bank Investment Daily

Summary: Workplace changes are making telecommuting more prevalent. Would telecommuting work for your business?

Most independent business owners are challenged by having to play multiple roles with limited time. They put on – and take off – many management hats, often wearing them simultaneously. But the one that can never be shed is that of Financial Manager and Planner. With the responsibility of managing your company’s finances comes the requirement to understand them.

When viewed together, the balance sheet and income statement represent a complete and, hopefully, accurate financial picture of the company. Unfortunately, some businesses produce two or three sets of financial statements – one for the IRS, one for the banker, and one for themselves. Whatever the reasoning, it is important to remember that the worst possible person to kid is yourself. Every business owner needs clear, concise, decision-relevant information.

Trust can be an overused word in the business world but a necessary concept. Through what seems like an endless stream of advertising messages, we are asked to trust products and brands. Politicians ask for our vote of confidence at the polling place. It can be both emotional and logical. Emotionally, vulnerabilities are exposed with the belief people will not take advantage of that openness. Logically, we assess the probabilities of gain and loss, calculate expected utility based on hard performance data, and conclude that the person or entity in question will behave in a predictable manner. In practice, trust is often what matters most. It is the fabric that binds employees to employers, customers to companies, and companies to their suppliers and partners.

When you buy a franchise, you get to operate a business and sell goods or services with name recognition. You buy a format or system developed by the franchisor, and training and support. But investing in a franchise, like all investments, involves financial risk. Franchisees must commit money and time, and must operate by the franchisor's playbook.

What's the key to having a successful and long-standing business? Does it involve having a revolutionary product or idea? Possessing specialized expertise to offer a needed service? While those things are important, the most critical factor that contributes to business success is how well you manage your cash flow.

Yes, cash flow really is king. You can have the most innovative product on the market or be the most experienced service provider in your area, but if you can't manage the money that flows in and out of your business, your business won't be successful — or be around for long.

A business seeking capital must recognize the importance of financial projections. A business financial projection is simply forecasting your sales and revenue to the lender. This information is important because it is a key indicator to your ability to repay a loan.

If you are unsure about financial forecasting for your business it might be best to hire a consultant. Most lenders will want to see a three- or five-year projection and there are as many as 14 items to include and fully support in your financial projection. You may also be asked to give a month-by-month breakdown for the first year, a quarterly breakdown for the next two years, and an annual breakdown for the final two years in your forecast. 

In a recent business seminar hosted by Mission Valley Bank, bank consultant Robert Dyck cited a statistic that 70% of businesses – large, mid, and small – fail due to cash flow problems. With three main sources of cash flow activity – operating, investing, and financing – he stressed how vital it is to understand and monitor cash flow in your business.

Michael Dell, founder of Dell Technologies, summed up his company’s lack of attention to cash inflows and outflows with an analogy. “We were always focused on our profit and loss statement. But, cash flow was not a regularly discussed topic. It was as if we were driving along, watching only the speedometer, when in fact we were running out of gas.”