April 23, 2018
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Simple steps help small businesses avoid stress

Larry Wold
By Larry Wold, Maine Market president at TD Bank.

The financial and emotional impact of the Great Recession has probably made many Maine small-business owners ask themselves, “Is owning a business even worth it anymore?”

The answer can, and should be, “Absolutely!”

According to the TD Small Business Happiness Index, a survey that examined the attitudes and behaviors of small-business owners in a dozen North American metropolitan areas, the top stressors for business owners in 2010 included (you guessed it): managing budgets and cash flow, demanding responsibilities, and long hours with limited time off.

However, despite the ongoing challenges of managing and growing a business, the survey also found that overall, small-business owners remain happy – citing personal accomplishment and being their own boss as sources of satisfaction.

So, Maine small-business owner: What is your current mood?

Here are five proactive tips toward eliminating stress and enjoying a leap of spring success for your small business!

Apply for a new SBA loan

Under the Small Business Jobs Act of 2010, the SBA has permanently increased limits under its popular 7(a) and 504 programs from $2 million to $5 million – and up to $5.5 million for energy-related projects. These loans can be used for general business purposes such as working capital, equipment purchases and real estate acquisition.

With the increased limits, business owners can anticipate significant cash flow enhancement and lower equity. For example, consider a TD Bank customer with $3,000,000 in revenue and 25 employees looking to buy a new, $400,000 CNC machine to support their manufacturing operations. Under the SBA financing solution (6 percent, 15-year note), the annual principal and interest payment would be $40,500 – increasing the customer’s annual cash flow by $52,300 versus conventional five-year financing at 6 percent. The payment terms are based on the useful life of the asset to be purchase and combined with putting less equity upfront, the cash flow for the company significantly improves.

Study these business-friendly programs and seize the opportunity, if applicable. Learn more by speaking with an SBA loan expert at a bank designated as an SBA preferred lender.

Update your current business plan

Did you meet or exceed your 2010 business goals? If not, review what didn’t work and learn from these mistakes. Write down realistic goals and expectations for 2011 and review them on a regular basis. Doing so will allow you to track your progress throughout the year and make any necessary modifications.

From a financial perspective, an effective business plan should include an accurate business balance sheet, income statement and cash flow forecast. Exact information on revenue and expenses, net worth and descriptions of assets and liabilities is crucial.

Finally, if your small business is in a position to grow, the better you can present a successful business plan, the more likely you will be able to convince bankers to approve your new loan on favorable terms. Specify what a new loan would be used for as well as an elaborate plan on its repayment. Most importantly, make sure your business plan proves positive cash flow and a profitable track record.

If you have questions or concerns about your business plan, speak with a small-business expert at a financial institution.

Save money on insurance

Many businesses today do not have the time or resources needed to staff a full-time employee benefits manager. Talk to your insurance agent about the needs of your business and what competitive, customized benefit plans are available to you and your employees. A highly skilled insurance team should be able to help you effectively choose the best benefits package to fit the needs of your business.

Small-business owners should also stay updated on the proposed changes concerning the Health Care Reform Act. Although many of the reforms don’t take effect immediately, some are already affecting small businesses. For example, the federal government can now subsidize up to 50 percent of employee premiums if a small business is willing to pay the first 50 percent.

If it has been a while since your last insurance quote, chances are an updated quote can lead to higher savings. When reviewing your 2011 insurance plan, if you feel that lower rates can be discovered elsewhere, partner with a broker who can help you shop for the best deal.

Take advantage of commercial real estate opportunities

One positive aspect of the recession is that it remains a buyer’s market for businesses looking for new space. Since 2007, commercial real estate value has dropped up to 45 percent nationally. High vacancies in ideal locations have led to desirable options at reduced and affordable rental rates. Search online, review the classified section of the local newspapers, or take a stroll in an attractive area. There may be an attractive vacancy at a preferable price.

Look for a solid financial institution that can build a long-term relationship and will meet your various banking needs – today and tomorrow. Before committing to a bank, look at their history of service and convenience to handle your checking and deposit needs. Ask about their ability to lend for various products such as lines of credit, mortgage financing for owner occupied, and investment real estate. A financially strong and well-capitalized bank should have a high-quality Moody’s rating (preferably Aaa) and never had to accept TARP funding. Your chosen bank will be a key partner in the long term growth of where you conduct your business.

Maximize online banking services

Online banking is a necessary tool for any business owner and is available at most financial institutions. The benefits of this useful service include 24/7 access to real-time information, account transfers and payment management. You can easily schedule and manage your payments, submit remittance information, and have an audit trail of your payment history. Many banks, including TD Bank, also offer free (and secure) online bill pay – saving you money on postage costs.

If you haven’t already, register your banking accounts online and check your account activity regularly. Having instant access to your history helps you closely monitor your accounts for any discrepancies.

Finally, tracking your accounts through online banking helps you avoid trips to the bank and allows you to focus on what’s most important: the success of your business.

Following these five proactive tips can put you on the track to happiness and increased profits this spring!

Larry Wold is the Maine Market president for TDBank.

Editor’s note: Submissions for business columns should be 650 – 850 words, and should be unique to the Bangor Daily News and pertinent to the Maine business community. Columns, a head and shoulder shot and a short bio can be sent to business@bangordailynews.com.


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