When small business leaders look back on 2020, many will see recurring themes of change, resiliency and the importance of relationships as they adapted to an unpredictable operating environment.
Many businesses leaned on relationships with their customers, suppliers, partners and financial support systems, including their accountants and bankers, to help navigate Paycheck Protection Program (PPP) loans, deferments and future tax implications.
As we move toward 2021 amid another potential wave of the pandemic, business leaders should lean into their relationships even more to unlock potential revenue streams, cost savings and cash flow options.
Here are some considerations for small businesses as they look to deepen relationships and weather another storm.
Stay Focused on Your Customers
The COVID-19 pandemic impacted businesses of all sizes, but more than half (54%) saw growth and four in 10 (42%) cited “paying attention to customers” as a top reason why, a recent WSFS Bank Business Survey found.
However, only 42 percent of small businesses expect sales to grow over the next 12 months, underscoring the need to tap into customer relationships as we move into 2021.
Use the successful operational changes your business adopted during the pandemic to provide customers what they need, when and how they need it, and be prepared to pivot if those needs change.
This will help with cash flow, helping you identify revenue streams and to have enough cash reserves in your business banking account to pay suppliers and cover payroll and operating expenses.
Make Sure Your Business Banking Is Not Only Transactional
Yes, you need your business banking account to seamlessly handle transactions. But even more important is establishing or deepening your relationship with your bank.
Nearly half of businesses surveyed by WSFS noted that their banks’ biggest roles during the pandemic were providing tools and resources (48%) and helping with loans (46%), including PPP and other U.S. Small Business Administration (SBA) loans that were available, but were also sometimes challenging when applying for them.
Having an established relationship with your bank that goes beyond deposits and savings can go a long way. Reach out to your bank to talk about options that are available to help your business navigate the pandemic in 2021, and to begin planning for your business’ finances post-COVID.
Make Sure Your Bank Has What You Need
One of the biggest challenges businesses faced when applying for PPP loans was discovering that their business banking institution was not an SBA-preferred lender and was not accepting and processing PPP applications on behalf of their customers.
This was an unfortunate situation that resulted in some small businesses not being able to secure PPP funding until the Federal government provisioned additional funds for a second round of loans.
In an uncertain environment, small businesses should be looking closely at the products, services and capabilities their banks, accountants and other partners have to help them now and in the future.
If you are considering SBA loans or want to learn more, make sure your bank is a preferred lender. Talk to your bank about both SBA and traditional business loans that are available, even if you are not in need of a loan now, so that you know what options you have in the future, including any SBA-backed relief programs.
Two key traits businesses look for in their bank, according to the WSFS Bank Business Survey, are being able to reach a live person 24/7 (54%) and having the ability to do their banking online (46%). These factors and products and services, including merchant services, payroll support, equipment leasing and more, should be discussed with your bank so you are prepared to manage your business’ finances under any operating environment.
As you prepare for the remainder of 2020 and early 2021 under uncertain operating environments, taking a good look at your relationships—and preparing to lean on them as needed—can help you manage short and long-term sustainability and success when we return to a post-pandemic world.
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