Patrick Novack, VP, Relationship Manager at Coastal Community Bank can help you plan for the present and the future.

Patrick Novack, VP, Relationship Manager at Coastal Community Bank can help you plan for the present and the future.

Business planning tips during an uncertain economy

Managing a business and planning during an economic landscape of rising interest rates, inflation, and possible recession is challenging. Patrick Novack, VP, Relationship Manager at Coastal Community Bank, talks to his customers regularly about the current economy and how to plan for the present and the future in the current uncertain climate.

“I talk to my customers regularly about their concerns about the economy,” Novack said. “It’s a real concern. I think that more business owners are just thinking, OK, how can I strategically position my business to weather events that may happen down the road.”

When having these discussions, Novack regularly recommends they think about liquidity, and their network of trusted professionals and reminds them the economy is cyclical and constantly evolves.

Liquidity

Novack explained that liquidity is a topic he regularly discusses with clients. “If you’re able to have more cash in the bank, you’re able to weather increases in prices of products and supplies, economic changes, etc. Not all businesses may have access to excess liquidity, but it is a good time to stockpile cash if you can,” Novack said. “If a business owner doesn’t have liquidity, it’s also a good time to talk to their banker about a line of credit, which would give them access to the liquidity they may need as they maneuver through the current economic environment.”

Communicate with your Network of Trusted Professionals

“I think it’s essential for any business owner to have a network of people that can help advise them through economic environments like the current one and all other business planning strategies,” Novack said. “It’s a good time for business owners to stay close to their network of people and ensure they have all the information they can.”

Novack advises that a trusted network often includes an accountant, lawyer, investment advisor, and banker. This network is not only a benefit for business decisions and strategies, but professionals in the network can provide referrals for other business needs you may have. Novack explains, “For example, if your business needs to improve IT infrastructure, or needs help preventing fraud, the team of professionals can provide recommendations for service providers that can help. Or, if a business has excess liquidity, Investment professionals can provide options on where a good place would be to keep it right now, depending on the timing of future needs for those funds.”

Because businesses grow and change, Novack advises business owners should review their network annually to ensure they are still a good fit. “It’s a good idea to review and make sure that they are still meeting your needs,” he said. “Their business can change and grow just as much as yours can. Whether it’s an accountant, lawyer, or banker, it’s good to connect with them at least annually and sometimes more than that.”

Plan for the Long Term

“It’s always the short term that can be scary. And that’s what people see,” he said. Novack advises business owners to look long-term if they can. “I’ve been in banking for 20 years and have seen interest rates go up and down several times. People are understandably focused on the interest rates as borrowing is more expensive for everybody, but based on history, the rates are likely to go down again eventually. The economy is cyclical, and although no one can predict rates, you have options,” he said.

Novack also advises businesses to continue to make needed investments. “If a person has a business need, such as needing a larger building for expansion, I recommend they continue to look, and if they find the right building that works for them and they can afford it, buy it. Just because they’re paying more now to borrow doesn’t mean they can’t refinance when the rates decrease in the future, and the economy is better. Getting into something now, like a new building or a new project, may provide benefits for them in the long term,” he said.

Novack encourages businesses to connect with their banker regularly.”It is an excellent time to sit down with your banker and talk about your business because that conversation can unveil options or strategies that the business owner didn’t realize were available,” he said.

Patrick Novack is a VP, Relationship Manager at Coastal Community Bank. For more information, contact Patrick or a lender at one of Coastal’s 14 local branches. www.coastalbank.com Member FDIC. Equal Housing Lender.

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