My advice to my small business owner clients in these times of change is:
- Be creative.
- Plan ahead.
- Seek new markets and seek diversity.
- Don’t put all your eggs in one basket.
- Don’t rely on one customer or one narrow market niche.
- Having just an on-line presence may not be enough.
- Having just a local retail presence may not be enough.
- Examine your opportunities and make adjustments accordingly.
- Always evaluate the costs relating to the intended changes.
- Consider your profit margins including your soft costs.
- When you take a new product to market you may have to offer a discounted price to kick off a campaign, but always evaluate costs and determine your break-even point for each market strategy.
- This will assist you in determining a long-term strategy for the future of your company.
Worrying about paying taxes is a good sign. A stabilized company without pre-tax net income is not a healthy company. If a company is on a path to growth, there usually is a positive bottom line after two or three years.
During the first few years of a company that is in growth mode, profits are often re-invested in inventory, equipment, marketing and payroll. That is to be expected and this is readily explained by an analysis of the balance sheet of the company.
Speak with your banker after you have prepared the 2018 year-end projections that reflect the changes the tax code will impact your bottom line and how you intend to reinvest the savings into your company.
Lenders like to provide capital to a company on the move. If you think you are going to have a good 2018, plan now. With the assistance of a qualified financial advisor you can decide if you need working capital, a term loan or perhaps an equity investor.
There are many options available to a growing company, but strategic planning is required to make it happen.