3 financial tools to prepare your business for what’s next

As the economy recovers, many businesses will experience new opportunities and challenges. McKinsey & Company® reports that 70% of companies worldwide expect an increased demand for products and services in the coming months. This growth will lead to a dynamic period for businesses of all sizes.

It’s difficult to know exactly what 2021 will bring, but your business can prepare to react by:

1. Putting financing in place

Consider the options below to determine what support would most help your company in the future. The right financing can make sure you’re ready to sustain forward momentum. Use our working capital calculator to assess your needs based on company plans, and review these financing options:

• A line of credit (LOC). Prepare for whatever the year ahead will bring by having the flexibility of using a pay-for-what-you-use financial resource. An LOC can help cover short-term cash-flow gaps so that you can focus on business goals.
• Business loans. If you’re rebuilding or updating your business with new equipment, technology, or other major needs, a business loan can help you make these purchases and pay them back over time. Companies with limited credit history can consider SBA loans, since they typically have a lower qualification and down payment requirements.
• A business mortgage. Investing in the property that houses your company can provide security and create a valuable asset for your business. Whether you’re refurbishing to meet market needs or making the move to buy after years of renting, a business mortgage can provide funds to purchase, expand, or refinance a commercial property. Use this calculator to help decide if this type of investment is right for you.
• Business credit cards. During times of growth and change, a business credit card can give you extra purchasing power. Cards are also a valuable tool for tracking and categorizing spending to support informed decision-making. Building up a payment history with a business credit card can help you establish or improve your company’s credit score.

2. Taking stock of your assets

Over the last year, your customers’ needs have likely changed. This means your business’s requirements to serve them have probably shifted as well. Conduct an inventory of your assets, and consider what upgrades might position your business best, including:

• Technology. Do you have the right hardware and software to meet your current — and future — needs? For example, if online ordering or reservations have become a significant part of your business, are you able to handle customer volume? If you have a physical business, evaluate your point-of-sale systems, and make sure they integrate with your online databases to create a seamless customer experience.
• Vehicles. Would new or upgraded vehicles improve or help you expand your services? If you began offering delivery last year, think about whether you might want to add new vehicles to support that service. This calculator can aid you in deciding whether it may make sense to lease or own.
• Property. Does your current physical property align with your needs? Look at your current location — does it align with the habits and needs of your most important customer base? If you’re renting, think about whether that is the best strategy long term, or if it would be better to own.

If you own assets that you’re not using — or don’t expect to use again in the future — you may want to consider selling them. Before making any decisions, check with your financial advisor to determine any tax implications related to a sale.

3. Looking at your business landscape

As your business has evolved over the last year, the customer base you’re targeting may have changed as well. Thirty percent of shoppers across all age categories in a recent survey by PwC® say they’ve shopped with a greater variety of retailers in the last six months. This means there could also be untapped audiences for your product or service.

• Evaluating your customer base. If you changed your business model, the type of customer you appeal to may have broadened. For example, if you introduced online sales or ordering, a younger demographic may have discovered you. Connecting with them via channels like social media may expand this relationship.
• Considering the competition. In the past year, did any new competitors emerge in your space? Look at what they offer to see if there are any ideas that might enhance your operation. Or, did any of your competitors stop doing business? When a competitor leaves the market, there’s potential for you to scoop up their former customers.
• Looking inward. Are you listening to what customers are asking for? All customer queries — and complaints, for that matter — provide clues to what your market wants most. Also, see if there are things customers frequently ask for in store or search for on your website that you don’t offer. Ask yourself whether opportunities exist to expand on your most popular products and services based on what you discover.

Learn more ways your business can stand out from the crowd and be ready for success in our new, free guide, Ready to Move Forward: Preparing Your Business to Harness its Potential.