FVCbank Helps Small Business Owners Build Long-Term Success
Being a small business owner isn’t easy. Whether you own a local shop, run a small consulting agency, or manufacture goods, many times you are focused on day-to-day operations rather than looking at the larger financial picture. This could cost you in the long run. The most effective way to ensure continued success and growth for your business is to create a strong financial foundation. This allows you to understand your cash flow, scale for growth, and be prepared for challenges and emergencies.
But there is no need to worry – FVCbank is here to help you create a roadmap to take control of your business finances and be successful. Since 2007, FVCbank has been serving residents and businesses in the DC Metro, Maryland, and Virginia areas. Our bankers think like entrepreneurs, just like you, including the importance of giving back to the community.
The State of Small Business and Impact on Economy
First, let’s talk about how small businesses are a key factor in the economic growth of the country. According to data from the U.S. Chamber of Commerce, small businesses contribute between 43% to 50% of the GDP, making them a vital part of the overall economic health. Those are large numbers when you think about it, and that means your small business, in the end, is contributing to almost half of the GDP!
There are also some changes occurring within the new administration that are designed to help small businesses. In a recent AP article, they talk about how the new administration will have a pro-business focus and highlight key challenges like pending changes to the Small Business Administration, tariffs, and changes to tax codes that are meant to help businesses grow in 2025.
Know Your Resources
Local banks like FVCbank are essential business partners for your overall financial health, but other great resources can provide free mentoring and templates essential to running your business.
SCORE (Service Corps of Retired Executives) is a nonprofit organization that has been providing small businesses with resources and mentoring for free for more than 60 years. They share their years of experience as executives in various roles and offer online courses and free templates to help you with financial planning, creating strong business plans, and more. Visit the greater Washington, DC chapter to learn more and find a local mentor.
The U.S. Small Business Administration is another great resource. You can access a wealth of resources, from how to pay taxes, legal issues, and most importantly, how to manage finances with free templates.
Build A Strong Financial Foundation for Your Small Business
Now it’s time to dig into the steps you should take and FVCbank resources that can help your business build a strong foundation and grow. We strongly encourage you to sit with your core business partners and review these steps together to create an action plan.
Understand Your Cash Flow
Cash is King, and if you don’t know how much capital you have or how daily operations impact your bottom line, then you could run into trouble. If you are already a FVCbank customer, make sure you are taking advantage of the free Business Insights app to monitor your financial health. Not a FVCbank customer? Contact us today to open an account.
There are many experts that give sound advice, and you could spend hours doing your own research, but here are the five most common and agreed upon tips:
- Avoid being short on cash
- Budget to have at least 3 months of funds on hand in case of any emergency
- Open a line of credit as a backup to fund reserves
- Keep a low balance on any business credit cards
- If you are using a merchant service provider, make sure you have quick access to funds
- Inventory Management
- Make sure your records are up to date
- If you are a manufacturer, make the most of your raw materials to avoid waste
- Don’t order more materials or goods than you need
- Get paid promptly
- Make sure to invoice customers as soon as possible
- Have strong payment terms to set expectations of due payment from the start
- Establish penalties and late fees for missed payments, don’t leave cash on the table
- Take advantage of your bank’s merchant services like FVCbank’s Merchant Service Program
- Upgrade your accounts payable practices
- Review your spending habits on a regular basis, and if possible, reconcile daily so you know your cash flow
- Prioritize all bills by due dates and process immediately to avoid late fees
- Pay all high-interest businesses credit cards first
- Lease any equipment instead of buying
- Leasing helps with managing and planning monthly budgets
- Maintenance costs are covered by the company you are working with
- More flexibility to upgrade equipment to support growth
Create (and Stick) to a Realist Budget
We all try to create a personal budget, but most of us don’t stick with it. That won’t work when you own and run your own business. Here are some great tips from our friends at SCORE, and your FVCbank business partner can help you review and recommend improvements to your budget.
- Business and personal finances are always separate – this is the most important rule for creating a small business budget. Always have separate business checking accounts to avoid any risks.
- Create a list of all business-related expenses – sounds simple enough, but you might be surprised when you and your team sit down and list out all expenses. This is good to practice at least once a quarter.
- Budget for your needs – knowing what goods or services your business needs for the short term can help you understand your operational costs, which is important for budgeting monthly expenses.
- Set expectations for your business income – if your small business is your only source of income, you need to make sure you are budgeting and forecasting to meet your personal finances. Skipping this step could impact your quality of life, for you and your family.
- Plan for growth – most business owners are focused on the short term or full year, but thinking about how you might want to grow over the next 3 or even 10 years can help you start budgeting and saving. After all, investing in your own business can only set you up for long-term success.
- Make needed cuts – as you list out all of your expenses, take some time to consider where you might be able to make a cut to reduce overhead costs. This isn’t about cutting corners; more about considering do you really need monthly manicures or pay for higher-end raw materials. This can really help you even rethink your overall operational costs.
Create a Strong Relationship with Your Local Bank
Larger, globally recognized financial institutions may seem like an easy choice when selecting a bank for your business, but how well do they actually know you?
Banks like FVCbank are embedded into the community, participate in local charities, and understand the needs of both residential and business customers. They believe in being good corporate citizens, and many of their managers, officers, and board members are actively involved with local organizations.
But it’s more than just giving back and being involved in the community, local banks are vital and strong part of the economy, and in some cases contribute more collectively to the GDP than large banks. Take a look at these stats from a 2023 survey from the American Bankers Association:
- Provided more than $2.3 trillion in loans for local communities
- Employ more than 450,000 people
- Hold more than $110 billion in small business loans
- Financed more than $150 billion for agricultural farmland and production
- Own more than $700 billion in commercial real estate like malls, office buildings, hospitals, and more
- Invested more than $180 billion in construction loans for builders and property investors
Plan for Growth
We’ve touched on factoring in growth as part of your budget, but sometimes you need a trusted partner and products to help you get there. Partnering with FVCbank means you have access to professionals who can help you scale for growth and offer products like:
- Business checking accounts
- Business credit cards
- Commercial lending products
- Merchant services program
- Employee programs
- Treasury management
- And much more…
FVCbank’s comprehensive business-related products and services give you peace of mind, knowing all of your needs are in one place and with a bank that actually is part of the community.
Plan for Challenges
One topic that most small businesses don’t address enough is planning for challenges, especially emergencies like natural disasters. No one really plans for being hit by a hurricane or other natural disaster, but it’s crucial as part of understanding and improving your financial foundation. If you don’t plan, then you can pay to respond to emergencies.
Many resources from trusted organizations and business insurance companies provide guidance to help plan for challenges and emergencies. Allstate has a great post that includes resources from Ready.gov and The American Red Cross, including a business impact analysis (BIA) guide to use as a template to create your own plan.
Another part of this type of planning is how to reopen if the worst does happen. Fortunately, the Small Business Administration has outlined steps you should take to reopen your business after a major event. They offer resources for remote training on emergency preparedness, resilience preparedness templates from the Small Business Development Center, and connect with a SCORE mentor to discuss how to pivot your business to recover from disaster.
Check Your Small Business Insurance Plan
This is another area most business owners don’t consider or skip with thinking about their financial foundation. Your business insurance plan is meant to protect you with every step of your business, especially in times of growth. FVCbank has comprehensive insurance products that cover items such as:
- Purchasing of new equipment
- Creating a new product or service
- Adding new employees
- Making changes to your storefront or office
Simply Business has a quick article that helps you think about what changes to your business you should share with your agent when reviewing or setting up your policy. Talk with your FVCbank business partner to make sure you have the right coverage.
Monitor Your Financial Health Regularly
Just like when you create a personal budget, then forget about it and then you are suddenly short on cash, regular review of your business budget is essential. It’s one thing to not have funds for going out to dinner but quite another if you can’t keep your business running. Here are some tips to keep you on track:
- Update your budget on a monthly basis and make sure you capture any new expenses
- Compare the actual budget vs. projected for each prior month to see where you might need to amend your budget
- Identify trends within your budget to see where you might be overspending or where a cut can be made
- Check your reserve and growth budgets to see if you need if you are contributing enough
- Consider budgeting software specifically for small businesses that can take some of the burden off of you and provide insights
- Consult your FVCbank business representative for advice and guidance to make your budget more efficient
Take Control of Your Financial Foundation with FVCbank
We covered many topics here, and you might feel a little overwhelmed, but that’s where FVCbank comes in. Built on the spirit of entrepreneurs and rooted in the community, they know exactly what running a small business like yours is like. From basic business checking accounts, merchant services, insurance, and much more, FVCbank is a trusted business partner for the greater DC Metro, Virginia, and Maryland areas.
