Ingram's Magazine July 2022

those calls on one hand. “Obviously, people are paying attention and want us to break out the crystal ball and tell them. While rates are going up, we’ll be more diligent about how long we hold rates, but there’s no real change in be haviors just yet—just a lot of talk.” So, where does all this leave execu tives assessing their capital needs? First, said Close, “proactively iden tify bottlenecks in your processes. Be open to changing your business model to overcome stress points. Innovate and pivot. For stability, build and strength en relationships with your associates, clients, business partners, and vendors.” It is important, he said, to be real istic in your assumptions about input costs, consumer demand, material sup ply, and labor availability. “Run mul tiple scenarios from worst case, most likely to best case. Be realistic about the cyclicality of our economy. Use this to prepare and incorporate these scenar ios into your strategic business plan. Downturns will happen, so proactively plan for them.” Tyson, like most other executives, re turned to the theme of relationships and

the role they will play in any downturn. “It is imperative for business own ers to build a trusted relationship with their banker who understands their business,” she said. “As we witnessed during the pandemic, business own ers need a banker who can help them navigate during times of uncertainty.” CrossFirst is working with clients to analyze the effect that multiple rate in creases may have on their companies’ ability to service debt and the impact it may have on profitability, she said, and “this consultative advice can help busi ness owners position themselves for op portunities as they arise during the next 18-24 months.” Not every company, Barth noted, will face the same level of peril. “Different businesses are more cy clical in a downturn,” he said. “We’re not predicting a recession, but feel that with prices this high, inflation this high, and rates this high, that’s certain ly a possibility. So, we’re spending more time with customers in cyclical indus tries, making sure they know what to do if there is a significant downturn. Espe cially with cap-ex and equipment and

facilities, because you’re adding a fixed payment, monthly or quarterly, to the company. You don’t want to get walled into that based on how you’ve operated the last 10 years.” History,saidHolewinski,“hasshown in downturns that executives who rec ognize the challenges early and make necessary adjustments in their finances by building cash and cutting discretion ary spending have fared the best going into and coming out of a recession. Do ing these two things to help preserve profitability and build a strong company balance sheet will help a business stand apart from an underwriting standpoint for new loans as well as position the business for growth if an unexpected opportunity presents itself.” Again, said Russ, it’s vital that com panies be proactive with their banks, be communicative, and update them periodically on what they are seeing at that customer level. “If you have bor rowing needs in the future, start those conversations with your banker now. At the heart of any relationship is good communication and proactive commu nication.”

All the expertise. All the advice you need. All in-house.

Wealth Management

Strategic Tax Planning

Estate Planning & Trusts

Investment Management

Retirement Planning

Financial Planning

866 -CREAT I VE | CREAT I VEPLANNING .COM

52

I n g r a m ’ s

July 2022

Ingrams.com