At GROWL, we believe in fostering community through meaningful conversations and connections. At our GROWL Connex events, we do just that by bringing local experts and entrepreneurs and business leaders together. To kick off our 2020 GROWL Connex panels, we brought in various financial experts, discussing business financial foundations and success.
Each member diversified the conversation with their vast expertise and experiences. The night was full of hard-hitting questions and expert guidance for every business leader who attended.
GROWL’s top 5 takeaways
1 Every business needs a business plan & exit strategy
It sounds elementary, but the panelists expressed genuine surprise at the high number of business owners who didn’t have a yearly business plan. However, each mentioned that that complexity in a plan isn’t always a good thing, and sometimes simplicity is king. A business plan is a rudder that keeps your business moving in the right direction. Rhoades suggests creating an always-accessible one-year business plan to help stay on-track.
When it comes to selling a business, and retaining its value, it’s vital to have an exit strategy. Through his experiences, Payne constantly stresses the importance of planning for exit years in advance. From growing and showing profits, to remove yourself as the “secret sauce,” a business needs to show foresight.
2 Employee retention is HUGE for financial success
Employees are a major investable part of your business. Many business leaders limit their investments to property, tools, and equipment, however, the experts stressed that employee retention is a great way to increase the bottom line while also strengthening your business. Learn more about fostering a positive employee experience.
3 Don’t run up your subscriptions
Johnston said that a great place to start trimming the fat from business financial foundations is in subscriptions. She’s not referring to software and essential subscriptions, she’s talking about things you rarely, or hardly use, like an electronic fax subscription service you forgot you signed up for three years ago. Those seemingly small $15/month charges accumulate to $ 100’s being cut from your revenue. “It all adds up,” Johnston said, encouraging owners to look at possible unnecessary subscriptions as a great place to save some serious cash.
4 Zeroing your books doesn’t add value
Payne says that most small and mid-sized companies want to limit their taxes, which is good, but when every penny spent is funneled through the company and written off, it leaves those businesses looking unprofitable on paper. He explained for every dollar of profit showing on the books, there is a potential for a 30% tax getting taken out of it (depending on your tax bracket). Still, he says that the same dollar, when shown as profit, is multiplied 3x when it comes to the market value it adds to your business. Johnston adds that she encounters lots of business owners who run successful and profitable businesses, but because they zero their books every year, they are unable to get a simple car or house loan. A bank sees little to no profit, and that’s it.
5 Market downturns aren’t all bad
The panelist addressed the current Coronavirus’ effect on the market, saying that instead of looking at it as a negative, investors could think of a down market as a massive “sale.” Rhoads and Johnston emphasized that if a business is focused on its end-goal, it can still be achieved regardless of the economic or political climate.