Banking strategies for managing market uncertainty

By Bereket Abraha, Peoples Bank

Bereket Abraha is a Vice President and Business Development Officer at the Peoples Bank Everett Financial Center.

Bereket Abraha is a Vice President and Business Development Officer at the Peoples Bank Everett Financial Center.

Planning for rising costs, accessing working capital, and investing in technology upgrades are just some of the ways local companies are navigating an uncertain time.

I’m not an economist. I’m a banker. While I can’t predict what will happen in the market, I have the opportunity to speak with local business owners every day, which gives me a clear picture of the challenges facing local entrepreneurs. Right now, concerns about inflation, inventory management, and rising production costs come up in almost every conversation. While businesses are experiencing and addressing these challenges in different ways, banking support and services can be part of the solution. Here are a few examples.

  • Business owners preparing for possible inflation should meet with their banker to discuss strategies for managing rising costs and general market uncertainty. Those in the construction industry, for instance, should bid projects that contain protection for potential cost increases. With labor and material costs climbing, this can help ensure they’ll more accurately bid and be compensated for the actual cost of a future project.
  • Material shortages are a concern for many construction and manufacturing businesses. A banker can help business owners access working capital and other cash management solutions to keep inventory levels on par with demand.
  • To further reduce costs and operate more efficiently, some businesses are investing in technology and specialized equipment. Because these upgrades can require a significant up-front investment, bankers can recommend different financing options.
  • Businesses in the retail and service industry are looking for creative ways to keep production costs down. A consultation with a banker who is well-versed in the industry and who has consulted with other businesses experiencing similar issues can serve as a helpful resource and may help owners yield solutions to keep pace with material and labor costs, along with overall expenses.

Working with a trusted banker can help a business work through challenging times by finding ways to improve liquidity, invest in technology, and secure capital for increased costs.

The value of banking relationships.

I believe open communication with a banker who asks the right questions and really seeks to understand your business is so important. The more bankers know about your business, the more they can do to help.

Additionally, while it is tempting to shop your services to the lowest bidder, there are significant benefits to having all your financial services consolidated under one roof. For example, if a business uses Treasury Services, business lending, and investment services, procuring these services from one provider improves efficiency, reduces costs, and can help lower your rate.

The biggest driver for rates is relationships. Businesses should communicate with their banker at least once a year to find out about rates, and those calculations should take place within a broader conversation about your full portfolio of services.

In times of market uncertainty — and when times are good — I encourage clients to call me before there’s a fire to put out. I’m also proactive about reaching out to them when I know local or global economic changes are impacting their industry.

Bereket Abraha is a Vice President and Business Development Officer at the Peoples Bank Everett Financial Center. Peoples Bank offers a full suite of products and services for small and medium-sized businesses. Please contact a local lender to learn how Peoples Bank can assist you with a financial solution that is right for your business.

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