How NY Businesses Can Weather Economic Uncertainty
If we had to describe business sentiment across New York state in one word, it would be uncertain.
Businesses today are facing a dynamic economic environment, ever-changing consumer preferences and rising supply and labor costs. Put simply, it’s tough times for many New York businesses — and if you’ve been struggling, you’re not alone.
“I’m talking to business owners every day who need help getting through these tough months,” says Dina Kempski, a Commercial Market Executive in Northwest Bank’s Buffalo market. “They’re looking for support in navigating inflation, high interest rates and access to credit. And on a business level, they’re looking to develop strategies to hire the right people and entice the customers they need to grow their business.”
However, business owners have several opportunities to move their businesses forward, even in a difficult economic environment — and there are plenty of resources available to help.
Read on for five strategies to help your business succeed in today’s market and how to find the support you need to reach your goals.
1. Focus on your business’ financial fundamentals
The first thing business owners should do in a tough market is dive into their financial statements to deeply understand the business’ financial well-being, Kempski advises. Look over your assets and liabilities, sales and cash flow, including borrowing costs, to gain a strong understanding of what’s happening in your business.
“We call it a financial checkup: We look at the current state of your finances to determine what kind of shape they are in and whether you need to make any changes in how you are managing to stay on track,” she says.
The checkup can help you understand what’s working well and identify areas for improvement — so you know which steps to take to strengthen your business.
2. Look into temporary debt relief
After years of elevated interest rates, borrowing costs loom large in many New York business owners’ minds. But your bank is an excellent resource to help you manage your debt, Kempski says.
“We have several options for loan relief, such as principal loan deferrals that allow you to make interest-only payments for up to three months,” she explains. “It’s not a long-term solution, but it can help you weather seasonality in your business and ease the financial pressure temporarily.”
Your bank can also help you develop longer-term strategies to reach your business goals, such as refinancing your existing debt into a more manageable monthly payment or opening a line of credit to increase your working capital. Your banker can also be a valuable sounding board to discuss goals and strategies and help you map out your best next steps.
3. Build your business credit
You’re likely well aware of the benefits of good personal credit — and your business credit score is just as important. “A good business credit score gives you leverage when you’re negotiating with suppliers,” Kempski explains. “It can help you secure favorable payment terms, which in turn helps you manage your cash flow.”
To start, owners should be aware of their business credit score and review their credit report regularly, Kempski says. “If you’ve had late payments in the past but they’re now paid in full, you can dispute them with the credit bureau and get them removed from your report,” she explains.
Business credit scores range from 0 to 100 — and, of course, the higher the score, the better. Kempski recommends aiming for a score of 60 or more to maintain good credit.
4. Streamline workflows and reduce waste
Today’s businesses need to do more with less, and Kempski recommends looking for opportunities to reduce costs by trimming the fat from your budget.
“Implement lean practices and continuously review workflows to eliminate waste and drive efficiency,” she suggests. “Automation is key: Make sure you’re leveraging it effectively to reduce costs and enhance productivity as much as possible.”
A small investment in staff training, for example, may allow your team to automate tedious and time-consuming tasks, freeing up bandwidth to focus on more strategic work, while investing in an innovative payment processing solution can help streamline the checkout experience, helping you reach more customers.
Reducing waste looks different from industry to industry. For restaurants, that might mean rethinking your menu to use similar ingredients across more dishes or finding creative ways to use leftover ingredients. In retail, it could mean temporarily culling your offerings to focus on top performers
No matter what your strategy, a solid understanding of financial fundamentals — and a conversation with your bank — can help you better understand your options and how each might impact your business.
5. Get support along your journey
Running a business is challenging, even at the best of times — and you don’t need to do it alone. There are several resources available to help you navigate economic uncertainty and keep working toward your goals.
Your bank should be your first point of contact for managing your business’ finances. From offering financial checkups to helping you manage your debt to connecting you to lending solutions to help you invest in your business, your banker can meet you where you are to discuss goals, strategies and next steps.
New York businesses have access to several organizations and programs to support their growth, including:
- Empire State Development: Offers tax-based incentives, as well as a range of programs to support growth, innovation and operational support for businesses across New York state.
- Erie County Industrial Development Agency: Offering tax incentives, or tax discounts and exemptions, to qualified businesses who invest in the community within the borders of Erie County.
- Pursuit NY: Offers 15 loan programs for businesses in New York state, ranging from start-up and working capital loans to commercial real estate financing.
- Linked Deposit Program: Helps existing New York State firms obtain reduced-rate financing so they can undertake investments to expand their markets and modernize their equipment, increase their capacity or capabilities.
- Regional Development Corporation Loans: May be used for permanent working capital, machinery and equipment purchases, as well as loans to effect changes in local ownership when the employment base of the company would otherwise be in jeopardy.
The bottom line
While New York’s current economic environment presents challenges, there’s still plenty of opportunity to move your business forward.
“Consumers become more community-minded during challenging times, and they’re seeking out local businesses like you. On top of that, your bank and New York state are here to support your business growth,” says Kempski. “By getting the help you need to manage your finances, you can position yourself to attract customers and build the relationships you need to succeed.”
We’re here to help. Connect with a small business banker near you for guidance in creating your financial plan, along with financial solutions developed with your needs in mind.
