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Top Tips From Your Banker - Tips for Running a Successful Mid-Sized Business

Top Tips From Your Banker - Tips for Running a Successful Mid-Sized Business

To get some timely tips regarding business management for Montgomery-area companies, we spoke with Tom Broughton (NMLS# 740813), Community Banking Market Executive for Cadence Bank.

Q: How would you characterize the current business and economic environment in Montgomery?

A: In one word, I would describe Montgomery as stable. There are a number of 50-plus year old industrial and manufacturing companies in Montgomery that are being run by second and third generations of families. In addition, a great deal of automobile manufacturing jobs have replaced some of the industrial and other manufacturing jobs that have left the area for various reasons.

In fact, the opening of Hyundai Motor Manufacturing Alabama in Montgomery about 12 years ago has had a big impact on the city’s business environment. Most new manufacturing jobs over the past decade have been with auto suppliers and technology firms associated with Hyundai. When you factor in the Kia automobile manufacturing plant just over the Georgia state line in West Point, the I-85/I-65 corridor has become a hotbed for Tier 1, 2 and 3 automobile manufacturing suppliers.

Q: Besides automobile manufacturing, what are some other big business and economic developments in Montgomery?

A: There has also been a great deal of commercial redevelopment in downtown Montgomery as the urban migration that began a few years ago continues. Montgomery is embracing the nationwide trend of young professionals and empty nesters moving back in town by creating multi-family and retail developments to attract them. Baptist Hospital has also seen some major expansion in the region, to include a new residency program in conjunction with the University of Alabama at Birmingham.

Q: What are a few of your top tips for running and growing a successful mid-sized business?

A: Mid-sized firms today need to make sure they’re taking advantage of technology whenever they can. The finance and accounting areas within a company can be a good place to start. Leveraging technology tools from your bank to manage your business finances, including receivables and payables, can increase productivity and efficiency, and reduce costs. These tools can also automate manual tasks, thus freeing up employees to focus their attention on more revenue-generating duties that add to the bottom line.

Another tip is to not be afraid to outsource in the right circumstances. Using outsourced CFO services is a good example: Mid-sized businesses can often use an outsourced CFO until they grow into the need for a full-time CFO, thus saving the six-figure salary and benefits it would cost to hire a CFO on a full-time basis.

I also encourage mid-sized business owners to maintain a long-term perspective when managing their companies and not be too short-sighted. Making decisions solely geared toward hitting revenue or profit numbers now can sometimes negatively impact a business three to five years down the road. For example, these kinds of decisions might result in a business not having sufficient capital or infrastructure later on to take advantage of growth opportunities that present themselves.

Finally, owners need to focus just as much on cash flow as they do profits — I’ve seen businesses that were profitable on paper shut their doors due to cash flow problems. While some businesses may be able to withstand short-term periods of unprofitability, it’s difficult to stay in business when cash runs out. So an understanding of how the typical business cash flow cycle works is essential.

Q: How do Cadence Bank’s diversified capabilities and team of bankers help local businesses succeed?

A: At Cadence Bank we take an advisor-based team approach. A Cadence business banker is one member of the “business advisory team” that mid-sized business owners should rely on, along with their CPA and attorney. We often try to set up meetings as a team when visiting with business owners.

One thing that makes Cadence Bank unique is that we deliver sophisticated big bank solutions with a higher level of customer service at an affordable cost. We also have specialized industry teams in energy, restaurants and healthcare, as well as strong treasury management, insurance and trust divisions. This enables us to offer mid-sized firms comprehensive banking expertise that many other banks our size (and even larger) can’t provide.

More Top Tips From Your Banker

Read more helpful tips and advice for managing your business at Cadence Bank’s Fresh Insights Portal.

 

This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.

 


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