WECU Expert Insights Feat. Business Banking's Jason and Dustin: Small Business Finances

Описание: WECU is insured by NCUA.

Running a small business isn’t easy—rising costs and constant change make every decision count. In this episode of WECU Expert Insights, Dustin Wilder and Jason Naylor from WECU’s Business Banking team share about how local businesses can stay strong. Hear practical tips on managing cash flow, avoiding common financial pitfalls, and knowing when it does make sense to borrow for growth.

TRANSCRIPT:

Keith Mader:
Hello and welcome to another episode of WECU Expert Insights. I'm Keith Mader, and today we're diving into the world of business banking. Today, they'll share practical tips. And if you're a business owner or leader, this is an episode you will not want to miss. Let's dive right in. Dustin, let's start with you. My first question is, you've worked with hundreds of small business owners over the years. I'm curious, what's the state of small business in our community and what are some trends that you're seeing?

Dustin Wilder:
Right now, it's kind of a cautious looking towards the future. I think our business owners are resilient. The show must go on, but they're dealing with things like cross-border dynamics, supply chain interruption, really high cost of employee expenses. And so businesses are having to really focus and not knowing what their expenses are going to be, and then also dealing with high employee costs. Minimum wage has gone up and just the cost of having people on payroll is increasing every year. So they are trying to wade through this and keep moving forward.

Keith Mader:
Yes, it is quite the challenging time for small businesses right now. But Jason, what is one thing that a small business could do to improve their financial position going forward?

Jason Naylor:
One of the most important steps that they could take is to look and review their cash positions, particularly around receivables and payables. Sometimes business owners forget to manage this really important dynamic in their business, and it can lead to more important financial health for their business in the long term. So maybe with your receivables, you can find more digital solutions to getting those receivables in on time. Or regarding payables, maybe you can negotiate terms with your suppliers and vendors for more favorable positions.

Keith Mader:
Really good advice. Appreciate that. Dustin, there's a lot of advice out there that you hear. We have the internet, social media, you're hearing all sorts of different things. I know one thing that I've heard in the past, and I'd love to get your take on it, is the advice that says, "Don't take out a loan to start a business." So what's your take on that?

Dustin Wilder:
Sure. As a banker, I think that's good advice, but it's a bit nuanced. When you are just starting and you're taking on debt and payments and you've got a clock ticking and you haven't even started to take an income, that's a really stressful position to be in. Having your funds be the first into the business is usually the tried and true way to do this. How can you go to a third party lender and ask them to take a risk when you haven't put your own funds in? So that's kind of where that comes from, but there's always situations where there could be favorable terms, specific programs where it does make sense. As long as that business owner has budgeted and they know what they're getting into, there's no one way to do it.

Keith Mader:
I think that's super good advice. And I think that that dispels a lot of questions that people have when they're thinking about getting financing, especially early on. All right, Jason, question for you is, what is the most common financial mistakes that hold small businesses back? Maybe one that they don't even realize that they're making?

Jason Naylor:
I think one of the more common mistakes that I see is businesses coming into the market with their product or service and maybe not valuing their pricing correctly. So sometimes we rush to get as many customers through the door as quickly as possible, particularly for new businesses. And so that means we lower our pricing. That can ultimately interrupt your business's objectives and harm your financial health in the long run. So something for us to consider. I would say a close second is we see a lot of business owners that don't create a really good separation between their personal finances and their business finances. This can have a huge impact both for their credit positions, right? If they look for lending from people like Dustin, or just try to set their businesses up for a little bit of clarity when it comes to things like taxes.

Keith Mader:
Yeah. You see a lot of that co-mingling, I'm sure, quite frequently when you're looking at different businesses and evaluating lending, so that makes a lot of sense.

Keith Mader:
Awesome. Thank you guys for joining me today, and thanks for joining us for another episode of WECU Expert Insights. We'll see you next time.