by Stephanie G. Abrams
If you run a business in Montgomery, or almost anywhere in Alabama, you know there’s plenty of uncertainty about the economy in 2024. With higher interest rates and instances of fraud increasing, it could be an unpredictable year.
My goal as a banker is to set clients up for success, so when they come to me each year with their updated business plans, there are five key areas I focus on with them. My list of key financial considerations can help set your business up for success.
• UNDERSTAND YOUR CASH FLOW: As you examine your finances, identify if you have enough cash to support your upcoming expenditures, particularly in the face of the current market. For example, it’s good to understand your cash flow and be prepared for unexpected expenditures or shortfalls in the coming year.
• CREATE A BUDGET THAT INCLUDES SAVING: Once you know where your cash is going, sit down with your banker and make a savings plan that works best for your business goals. It might be hard to determine what to save and where, but that’s what your banker is there for. A decent goal to start with is saving three to six months of operating expenses.
• MONITOR YOUR ACCOUNTS CLOSELY TO PROTECT FROM FRAUD: Preventing fraud is a top concern these days. One of the simplest ways to keep your finances secure is to check your accounts each day. If you must send a physical check, take checks to the post office, drop them inside and use tracking. Once you see a deposit clear, check the front and back of the check to make sure the right person cashed it.
• REVISIT YOUR INVESTMENTS: Now is a good time to work with a financial professional to run a diagnostic on your portfolio and make sure it’s performing the way it should. The key is to be sure your investments are not concentrated in a particular asset class or sector. A professional will offer ways to help minimize risk, particularly in this market.
• KNOW YOUR CREDIT CARD RATES: Look at the interest rates attached to each of your business credit cards. Ideally used for smaller expenses, credit cards are great in a pinch and can make smaller emergency costs easier to handle. Paying your credit card bills on time helps your credit score and can help with business financing in the future.
• BONUS TIP: Build a relationship with your banker. The best time to get to know your banker was yesterday, and the second-best time is now, before you need them in an emergency. Getting your banker involved in your business allows them to know how you operate, learn about your industry, and proactively identify financial opportunities for your business. A strong relationship with your banker will help set you and your business up for success.
Stephanie G. Abrams is Vice President, Market Manager at Valley Bank, based in Montgomery. She’s been in the banking industry for over 20 years.
Stephanie G. Abrams / 334.270.3040 / [email protected]
This article is for informational purposes only and is not a substitute for individualized professional advice. Individuals should consult their own tax advisor for matters specific to their own taxes, and nothing communicated to you herein should be considered tax advice. Valley National Bank does not provide any financial, economic, legal, accounting, tax, or other recommendation in this article. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice.
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