The Business Fundamentals Checklist

Shoring up your small business in 2017? First, get back to basics, suggests Pacific Continental Bank CFO Rick Sawyer.

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Over the course of a long career in the community banking and nonprofit sectors, Pacific Continental Bank Chief Financial Officer Rick Sawyer has developed a healthy appreciation for the basics.

The business basics, that is — those tried-and-true principles every entrepreneur must master to operate smartly today and access growth opportunities tomorrow, however flush or lean it shapes up to be.

“The best-run small businesses tend to react to uncertainty by sticking to business fundamentals,” says Sawyer. “Serving customers well, running more efficiently, upping their efforts to retain and attract customers and taking care of their people.”

Pacific Continental relies on some key principles of its own as it advises community-based businesses, health care professionals, professional service providers and nonprofit organizations across the region: focus on quality over quantity, be prudent and conservative with cash, rely on trusted advisors and manage growth carefully.
IMG 8172Pacific Continental Bank CFO, Rick Sawyer

Despite some current unknowns within and beyond the realm of banking regulations, the forecast for Oregon’s economy is mostly sunny heading into spring, says Sawyer, and, for those small businesses that hew diligently to a few essential tenets, there’s plenty of opportunity to bask in the warmth.

Keep an eye to the horizon, but don’t ignore what’s right in front of you. As 2017 continues, the tight credit structures of the post-recession economy will likely keep loosening, predicts Sawyer. And in spite of the uncertainty whipped up by a new administration and shifting interest rates, lenders should remain friendly to small businesses, save any unforeseen economic shocks.

How can businesses better position themselves to secure loans and access capital in this environment? As always, a watertight business plan is key, says Sawyer. The most developed of these plans will clearly articulate goals and lay out a plan for accomplishing those goals while accounting for an unexpected shift in the economic winds.

Beyond that, says Sawyer, small businesses should remain open-minded about how they’ll achieve growth; sometimes, the wise bigger-picture strategy isn’t securing a loan, but accessing more capital.

“A common mistake for many entrepreneurs is seeking debt when they need equity,” he says. “Remember, the decisions made about financing a new business will set the stage for years to come, and impulsive decisions today put the dream at risk tomorrow.”

Of course, no business eyeballing growth should ever neglect to attend to what’s happening right in the present moment. This means keeping the focus on clients — both existing and potential — and concurrently taking fantastic care of employees, Sawyer adds.

Get smarter before you get bigger. Several additional economic realities make this a good time for small businesses to consider growth, notes Sawyer.

The Federal Reserve appears wary of increasing rates too quickly, he says, though rates might still increase up to three times this year. This would impact short-term rates and variable-rate loan instruments the most deeply, but all in all, says Sawyer, it’s still a pretty good time to be a borrower, if you exercise a bit of restraint.

It’s always tempting to chase the next best thing — that long-awaited expansion, the second location, the new product rollout — and then the next best thing after that.

Slow down, advises Sawyer; unrestrained growth can leave the strongest enterprise gasping for air, and far to the left of its core business model.

“When business is good and growth is fast-paced, many owners are too busy and excited to carefully examine their situation and diligently plan for the present and future,” he says. “The peril of growth can be that, if left unchecked, it can consume all your cash and resources.”

Such efficiency is particularly essential for Oregon’s nonprofit organizations, Sawyer adds, which continue to wrestle with securing and operating on sustainable funding.
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“Nonprofits need to be extremely entrepreneurial in finding money, operating resourcefully, serving their clients and funders well, and retaining their best staff members,” he says. “Which sounds to me like the exact way a good business should run.”

Know what you don’t know. Identifying your institutional knowledge gaps? That’s important whether you’re positioning yourself to access loans and capital now or mapping out a plan for doing so further down the road. Either way, you’ll never get from here to there unless you manage to fill in those gaps.

Pacific Continental advises customers across all sectors out of 15 banking offices in Oregon and Washington and loan production offices in Washington and Colorado. In a changing bank regulation environment, says Sawyer, this financial counsel is essential, but an organization’s stable of advisors shouldn’t start or end there.

From legal and accounting advisors to HR experts, Oregon’s most successful small businesses surround themselves with people capable of ably navigating them beyond their areas of expertise, says Sawyer: “Small-business people have more than enough on their plates. You have to invest the time and resources to build a team of experts that can provide sound counsel. To me, that is a fundamental business practice.”