Business Finance Basics: Presented by Truist

Watch the video below or scroll down to read the recap

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In this workshop, Truist representatives Nick Hale, Oliva Faria, and Ani Chowdbury taught the basics of business finances including how to manage your cash flow, tips for building and expanding your business finances, and tips for protecting your business finances.

Before You Jump In

You'll want to reference or download the Truist Business Finance Basics Guidebook before you review this class recap. Our presenters walked attendees through information found in the guidebook: https://bit.ly/bizfinancebasicsguidebook

Workshop Recap

Your business expectations: Ask yourself the following...

• How long have you been in business?

• What are your annual sales?

• Where do you see your business in 5 years?

• What do you need to know, do, or learn to get there?

Fundamentals for business growth

Your business is unique, but there are a few things every business needs to manage finances effectively:

• Business bank accounts

• Efficient methods to receive payments from your customers

• Efficient methods to make payments to your suppliers

• Cash flow management tools

• Access to credit

• Insurance coverage

• Depending where you are in your business, you may need one or two—or all—of these.

Manage your business cash flow

Business Banking

Business financial accounts help you:

• Manage your business

• Understand and manage business cash flow

• Establish a professional reputation

• Comply with IRS regulations

Personal financial accounts help you:

• Pay your bills at home

• Grow your retirement funds

• Support your household

• Reach your personal goals

Ways to keep your business and personal finances separate:

1. Get an Employer Identification Number (EIN) for your business

2. Open a business checking account and request a debit card

3. Open a business credit card

4. Pay yourself by transferring your salary from your business account to your personal account

What do you need to open a business deposit account?

For each business owner:

• Social Security Number (SSN)

• Date of birth

• Personal address

• Government-issued ID

• Individual percentage of ownership

For the business:

• Legal business name

• Federal tax ID or Employer Identification Number (EIN)

• Business organization paperwork and start date

• Business physical address

Tips for business debit and credit cards through responsible card use

Business debit cards are great to:

• Use for everyday purchases and ATM deposits

• Provide to employees who make purchases for the business

• Protect you from fraud

Business credit cards great to:

• Use for everyday purchases

• Control cash flow

• Establish credit history for your business

• Protect you from fraud

What's cash flow?

Simply put, cash flow is the money in minus money out. Important parts of cash flow are your income sources (money in like selling merchandise or providing services) and expenses sources (money out like office supplies, tools and equipment, cars, employee wages, and vendors)

How do you manage your cash flow?

Feel free to check these off inside of your workbook should you choose to download it above.

Cash flow statement

A cash flow statement can:

• Reflect operational trends

• Identify cash flow fluctuations

• Provide insight into business liquidity

• Project ability to pay expenses as they become due

Cash flow statement sample

Optimize your cash flow

• Reduce operational costs

• Streamline accounts payable and accounts receivable processes

• Outsource time-consuming tasks

• Get rid of outdated or unused equipment

• Evaluate your pricing for potential increases

Ask Yourself: What are your biggest expenses? Are there areas you could cut costs? Are there ways to optimize accounts payable and accounts receivable processes?

Build and Expand your business

Merchant Services

1. Payment Acceptance: including debit, credit, and mobile payments like Apple Pay, Google Pay, and Samsung Pay

2. Payment Processing: such as credit card terminals and mobile swipers

3. Customer Analytics: so you can understand your target market

4. Transaction Protection: against fraud and data theft

Do you need merchant services?

• How do you currently accept payments?

• Which methods do you accept so customers can pay quickly and easily?

• What type of business do you have?

Why does a business need to borrow?

Businesses borrow to:

• Expand or lease a new location.

• Purchase new equipment, tools, or supplies.

• Gain access to startup capital.

• Weather seasonal lulls.

• Prepare for seasonal highs.

• Consolidate existing business debt.

• Have available funds for growth opportunities.

Borrowing Solutions:

1. Small Business Loan - Borrow one lump sum for what you need. From inventory and unexpected expenses to debt consolidation—no collateral is required.

2. Small Business Auto Loan - Replace or upgrade vehicles used for business purpose

3. Small Business commercial vehicle and equipment Loan - Purchase new equipment or vehicles or refinance your current vehicle or equipment loans by locking in a better interest rate.

4. Small Business real estate Loan - Buy or refinance real estate for your business or for investment purposes.

5. Small Business line of credit - Access to money—whenever you need it. Manage seasonal cash flow, expand inventory, or grab hold of a new opportunity

What to know about business loans

• The best type of financing for your business (credit card, loan, or line of credit) depends on your situation and what you want to accomplish.

• Business credit cards are a great way to start building business credit through responsible card use.

• Many business loans are unsecured, meaning they’re supported by your creditworthiness without the use of collateral.

• Always make sure the loan terms align with your expected cash flow so you can meet the payment terms.

• Successfully repaying a business-related loan helps your business’ credit score.

• If you decide to borrow, expect that each month you’ll need to pay interest and usually some portion of the outstanding loan balance.

• Lenders may require owners to provide a personal guarantee as well.

Protect your business

Business Insurance - Remember these 3 things:

1. Business insurance protects you against unforeseen events

2. Even minor mishaps can lead to large lawsuits

3. At a minimum, general liability insurance is a must for all businesses. Work with an insurance professional to determine the appropriate coverage for your business.

Potential Risks include:

• Fire

• Cybercrime

• Bodily injury

• Theft

• Property damage

• Disability

• Missed wages

• Vehicular accidents

Types of business insurance:

• Commercial Property Insurance - Covers everything from building and inventory to signage and furniture, and safeguards against loss, theft, or damage. Can also protect against business interruption, loss of income, and loss of use of property due to these.

• General Liability Insurance - Manages risks and protects your business from claims or lawsuits.

• Life and Disability Insurance - Allows your business to continue operating in the event of death or disability.

• Workers’ compensation insurance – Covers lost productivity, employee medical expenses, and missed wages.

• Commercial auto insurance – Covers a company vehicle in the event of an accident, damage, or theft.

• Business interruption insurance – If a covered event causes your business to close or miss out on income, this insurance protects you.

• Cyberfraud insurance – Helps protect your business from data breaches and other cyberattacks.

Next Steps

What are 3 action items that can help you achieve your business goals?

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Let's Get in Touch!

Jim Spencer, Executive Director Bluefield WV Economic Development Authority | jspencer@bluewv.org | (304) 902-2332 x 2405

Nick Hale | Truist

nicholas.hale@truist.com

Faith Blackwell, Administrative + Marketing Assistant Bluefield WV Economic Development Authority | fblackwell@bluewv.org | (304) 902-2332 x 2408