Small business owners and medical practice owners face similar challenges when running a business, and seeking essential guidance from their banking partners is critical.
“When looking for a business banking partner, transparency and open communication are key,” says Eric Jones, VP, Commercial Lending, at First Federal Lakewood. “Industry knowledge is important, too. A banker with those qualities will be able to guide you toward success.”
Smart Business spoke with Jones about the key advice that small business owners and medical professionals should look out for to ensure their success in a competitive market.
When it comes to owning a business or medical practice, what should owners consider?
For small business owners, it’s crucial to have a deep understanding of both your internal and external teams. This includes any key management personnel, attorneys, CPAs, or other financial advisers.
Similarly, medical practice owners need to recognize the importance of collaborating with financial advisors, especially CPAs. For many medical practices, CPAs often act as CFOs, assisting in making informed financial decisions and guiding them through both personal and business matters.
However, both small businesses and medical practice owners can benefit from treating their CPAs as an extension of their team. CPAs bring valuable expertise and insights, not limited to generating tax returns but as partners who provide guidance for strategic decision-making.
For example, a CPA may help guide a health care provider to think about equipment needs and overhead costs, while their business banker will help on the financial side when it comes to loans.
Additionally, the right banking partner is necessary to any business. A skilled banker will be able to identify hot button issues that keep business owners up at night, while helping address these issues and uncertainties head-on. In turn, you can focus on your core operations. Look for industry experts when it comes to finding a business banking partner. These individuals can offer customized financial solutions that other banks might not have.
What are additional recommendations?
One of the most prominent concerns in today’s market is finding qualified employees and talented professionals. Providing incentives, like insurance and retirement, are a great way to draw in new employees.
Medical practice owners should be aware that there may be a cost associated with offering incentives. Professional Employer Organization firms or a chamber can offer these services and help keep wages level.
If you’re in the market to acquire a business or medical practice, it’s important to understand your business’s outlook, create a business plan and outline any potential risks. In addition, improving creditworthiness is crucial when it comes to opening a business no matter what the industry, especially if a business loan is in your future.
The approach for small businesses and medical practices is similar to personal obligations. Timely payments, responsible use of credit and effectively managing debt can significantly enhance credit profiles.
How can small businesses and medical professionals better manage their cash flow?
Both small businesses and medical practice owners need to take a proactive approach to manage their cash flow effectively. Seeking advice from various advisors before making significant decisions, such as selling a practice or managing capital tax, can lead to smarter strategies and better financial outcomes.
Second, small business owners and medical practice owners should make it a priority to take advantage of treasury management services at their bank. Oftentimes, community banks are more likely to offer fee-friendly structures with their treasury management services that align with your goals, allowing you to be more successful and help you reach your goals.
The relationship between small businesses, medical practices and business banking partners is a crucial partnership for success. Collaborating with CPAs, managing cash flow, addressing industry-specific concerns and maximizing creditworthiness are essential steps toward achieving financial stability and growth.
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