Ask a Banker: SMB Q&A Series

I’m planning to exit my business sometime in the next five years. What can I do now to prepare?

The line between personal and business finances is never blurrier than when you’re planning an exit, and you’re smart to be planning for this in advance. When I’m helping clients navigate succession planning, we really have two goals in mind: What can we do to maximize the value of the business and what can we do to ensure their personal finances will support the next phase of their journey.

• Learn more: Infographic: Succeed at Every Stage of the Business Life Cycle

On the business side, look for any potential red flags that might impact valuation. Maybe you’d benefit from restructuring your debt to boost the financial strength of the business, or onboarding new clients to diversify your revenue streams. Thinking about this now gives you time to take action and put yourself in the best position possible before your exit.

On the personal side, make sure you’re taking advantage of all the retirement benefits you’re extending to your employees. And talk to a banking expert who can walk you through your options, such as creating a trust for your family. Plus, if you have a buyer in mind, an expert can help you understand your options on how to complete the sale in a way that works for both of you. 

• Learn more: Retirement Planning Checklist

And congratulations again on planning for this in advance. Your future self will thank you!

My business is profitable on paper, but I’m still struggling to cover expenses. What am I missing when it comes to cash flow?

This is something I hear from business owners over and over. You’d be surprised how many people run wonderful, thriving businesses but worry about making payroll. 

I think it’s important to start by looking at your cash flow cycle. Obviously, the faster customer payments hit your account, the better. So look for ways to help speed up the payment process for your customers. Consider negotiating shorter payment terms, and make sure you’re offering a range of payment options. That can be especially important for B2B, where checks are still widely used and can significantly delay when you can access your money. 

Your banker can work with you on specific treasury management tools designed to help speed up and process customer payments too. Consider being able to accept real-time payments through Merchant Processing — not only is it a convenient option for your customers, but it also provides your business with an additional method of collecting payments. The benefit to your business comes in the form of speeding up receipt of monies owed, and by extension, increasing your available cash flows.

You can also look for ways to transform costs into revenue streams. Consider making purchases with a business credit card that offers cash back (or other rewards) that can enrich your business. And look for ways to diversify your business: If you run a clothing store, for example, explore offering personal styling or personal shopping services. 

And finally, emergency funds aren’t just for your personal finances — they can also help your business. Setting aside a percentage of your revenue each month helps ensure you have a cash buffer to help you cover expenses. 

I have big plans for growth that I’m working toward in 2026 — but I’m torn on whether to fund this growth with financing or with my business’ own cash reserves. How do I decide?

First of all, kudos to you for strong financial management: The fact that you have the option to use cash reserves to invest in your growth says a lot about the financial strength of your business. 

When I’m helping business owners make this decision, I start by asking them about their goals. Where do you want to be in three to five years, and what steps will you need to take along the way to get there?

Forecasting is your best friend here: You want to know how growth or expansion will impact your cash flow so you can make the right decisions. Forecasting also helps you figure out how much capital you’ll need: Not only for new equipment, but also to cover downtime, maintenance costs and potentially moving into a larger space. That alone might dictate whether you feel more comfortable funding the expansion with cash reserves, financing or a combination of the two.

I also recommend reflecting on timing. If you’re thinking of replacing machinery, have you talked to your CPA about whether you’re at the end of your equipment’s useful life from a depreciation perspective, and is it time to start making the most of those deductions? If your equipment needs regular maintenance, is it less expensive to replace it now or wait until next year? The more you can scenario-map each possible decision, the more confident you’ll feel.

I love when business owners come in with lofty goals because we can weigh all their options and map out potential plans, so they have all the insights they need to act when they’re ready. We can also help you identify the right financing options and mix in potential funding sources to fit your specific needs. From SBA loans to conventional financing, and everything in between, options vary and need to align with the unique goals of your business. 

But really, I encourage you to come into your local financial center even if you don’t have any particular plan in mind and don’t have any immediate banking needs. These early conversations can help you choose what will work best for your business — and, most importantly, take all the time you need to make your decision.

Have a question about how to grow your business? Our dedicated business banking experts are here to help. Fill out the form below to start planning the next phase of your journey.