Three Tips from Wells Fargo for Positioning Your Small Business for Success

From Kevin Barri, Wells Fargo’s Region Bank President for the Northern Golden State Region

Managing a small business is often an intimidating prospect, especially during periods of economic uncertainty. Today’s small business owners have had to overcome a global pandemic and are now contending with a business environment that is defined by supply chain stagnation, rising inflation and interest rates, and a highly competitive labor market. Determining the best path forward for ensuring the success of your small business in such a challenging economic climate is no small feat.

Thankfully, there are steps business owners in our community can take to bolster the resiliency of their businesses, and they don’t need to undertake this journey alone. By taking advantage of the following three key points and working with local organizations that can elevate your business, our community’s entrepreneurs and small business owners can set themselves up for success:

1) Formulate a strong business plan

Successful businesses don’t materialize out of nowhere. Creating a solid business plan is the integral first step for business owners, whether you’re just beginning to create your business or charting out the next fiscal year for an existing enterprise. The importance of having a strong business plan cannot be understated — according to the U.S. Bureau of Labor Statistics, about 20 percent of small businesses fail by the end of their first year. By the end of their fifth year, 50 percent go under; and by the tenth year, that number rises to 80 percent. While these are intimidating statistics, having a proper business plan in place can allow you to assess your pain points, consider appropriate strategies, and prepare your business to adapt to the changing needs of customers or changing economic conditions as needed.

To get started, there are many free resources and tools to assist business owners in creating a successful plan. For example, Wells Fargo offers free business planning resources, including a step-by-step business plan tool to create and maintain your own written business plan. There are also free mentorship opportunities available where business owners can get hands-on help setting and reaching business goals from peer-mentors and industry experts.

2) Understand your finances and staffing needs

Every business has different startup and maintenance costs, but they all have one thing in common — having a financial cushion. While most small businesses are initially financed by personal savings and credit, your business will likely face a need for additional financing at some point. It’s important to have savings to fall back on as you focus on ramping up your business operations. To get yourself in the best position to obtain financing before you need it, establish a relationship with a small business banker who can help you understand your initial financing needs and options, and strategize ways to build your credit profile.

It is similarly important to consider how many individuals you will need to hire as your business continues to grow. Many businesses start out as sole proprietorships, while others require support staff and employees from the get-go. If you intend to hire full or part-time employees right away, make sure you’re comfortable with and can afford the costs associated with hiring staff. Take time to understand what type of employee is right for your business. For example, contractors can be a great alternative to full-time employees for newly established businesses.

3) Build a strong professional network

Having a strong support system in place can make the difference between your business thriving and failing. It’s critical to budget the time to establish relationships and build a network of other professionals who can help you succeed. In addition to a small business banker, you should also establish a relationship with a lawyer, a Certified Public Accountant (CPA), and any other professionals pertinent to your industry. It’s also a great idea to network with other small businesses by joining your local Chamber of Commerce or other business and industry organizations.

Sacramento is powered by small businesses, and Wells Fargo is committed to helping small business owners in our community succeed. Though economic challenges continue to impact our region, we as a company are dedicated to fostering an inclusive economic recovery and empowering small business owners to thrive and be set up for success in the long-term. If you’re curious about how you can empower your own small business, visit a local Wells Fargo branch and set up a meeting with one of our business specialists today.

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