If a business wants to survive in today”™s new economy, plan, plan and plan.
George Strayton, president and CEO of Provident Bank, said he cannot stress enough the importance of having a business plan.
“When I started with Provident Bank in 1980, after leaving a large national bank, I almost felt like I had stepped into ”˜It”™s a Wonderful Life.”™ The banking industry was so different ”“ I had 90-day plans, not five-year plans. Today, the economy has changed the way we all do business, and we have to change with it and work smarter.”
Strayton has been making the rounds in Rockland County.
In his address at the Palisades Institute Oct. 8 at the Rockland Country Club, he spoke on how the financial system melted down and the effect on the region ”“ as well as the state and nation ”“ have impacted the way banks do business.
“During these times, banks are particularly careful to make sound investments. Not only do they have to protect their depositors but stay viable.”
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Ron Hicks, president of the Rockland Economic Corp., thanked Provident”™s longtime CEO for “putting it in layman”™s terms so we can understand what happened and what kind of recovery to expect.”
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Strayton joined the Rockland Business Association at its monthly breakfast at Casa Mia Manor House in Blauvelt the following week, Oct. 14, to talk to small-business owners about keeping doors open. He encouraged them to take stock of their business, their employees and their immediate circle of support while doing business in the new economy.
Strayton said it”™s key to have the entire organization ”“ whether it is five or 500 people ”“on board with the company”™s goals. “When I started with Provident, we had 100 employees and I knew each of them. Now, we have 600 employees, and I make it my business to know each of them even though we have grown in numbers. It”™s important that everyone is on the same page when it comes to doing the best possible job, keeping costs down yet keeping morale up.”
It”™s also key to have a business plan, he said: “If you don”™t have one, it”™s easy to veer off the road…when you deviate you are making conscious decisions. Without a decent business plan, one that is updated every six months or every year, you aren”™t going to be able to effectively track your cash flow. For small-business owners, it”™s easy to put off because they are the boss of their own company ”“ but for sole proprietors and small business, it”™s even more important to manage your money. Cash is king, and cash flow is imperative to keep your business successful.”
The new economy has made all business owners more disciplined and he stressed the need to be surrounded with a circle of competency.
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“A good accountant who understands your business; a good attorney who understands your business and is there when you need them; and a bank that is going to be able to meet your needs up the road. Know what you may need before you actually need it. It”™s important to know what your bank can and can”™t do. Think of your accountant, attorney and banker ”“ and your insurer ”“ as your financial team.”
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For companies handling human resources, Strayton says, “It”™s a new world out there. People in your organization need to be well versed in what they can and cannot do. There are too many opportunities for claims of sexual harassment, discrimination and other company policies that may clash with current employment law. It”™s key that the person handling your HR knows what they are doing. At the same time, someone who can come in and asses your risk management and track it ”“ even if it assigned to an employee ”“ is a key function today. You need to know where you are spending money, where you should be investing and what type of insurance you may need.”
If you find yourself becoming overextended, “Don”™t wait to call your bank. The minute you start experiencing problems, that”™s the time to call your bank in….don”™t wait until you are in a hole. Just stop digging. The vast majority of people have credit debt up to their ears, and I urge them not to wait. Again, I can”™t stress the importance of communication with your circle of support. Everyone needs to be on board.”
In regard to pending legislation to give more regulatory powers to states when it comes to the banking industry, Strayton said, “There are plenty of regulations already in place…what got us into trouble were the lenders who were not regulated. I think the general idea of a consumer protection agency is a good idea, but to regulate the unregulated, not to impose more paperwork and rules on the financial industry that have adhered to regulatory policy.”
