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Northwest Bank. Equal Housing Lender. Member FDIC.
Hello, and thank you for joining me on another episode of the Northwest Bank podcast. I'm your host, Luther Lampert. This year, National Small Business Week is taking place April 28th through May 4th. And to celebrate, we wanted to talk about small business. Start up businesses are an important part of our economy.
Luther Lampert:They drive innovation, create jobs and support local communities. Yet, small business owners likely face common challenges on their path to success. Today, we're going to discuss a few tips to help guide entrepreneurs as they begin planning to expand their small business. Joining me today is Ross Tietz. Ross has been with Northwest Bank for 7 years.
Luther Lampert:He started with the bank as a management trainee before joining the commercial department as a lender a year later. After 5 years, he became a business banking manager in our Des Moines metro market. Ross works with a portfolio of clients in a variety of industries. In his free time, he enjoys watching the cyclones, golfing, and chasing around his 2 daughters. Ross, thank you for joining us today.
Ross Taets:Absolutely. Excited to be here.
Luther Lampert:So starting your own business can be tricky. Typically, as a start up, you've come up with a great idea for a product or service, and you're really good at providing that product or service, but maybe not hiring, accounting, filing taxes, or securing financing. So it can be a struggle to get started at times. Ross, if you have a great business idea, where do you go to get started? What are some resources that are available?
Ross Taets:Yeah. I think, where to start can kinda depend on maybe what your background is and what stage of planning you're in. For those that are really in the idea stage of things, maybe coming out of college or maybe jumping into a new industry entirely, but you just know that you want to be a business owner, I would say, the SBDC office, the Small Business Development Center, is a great place to start. There are a ton of variables, obviously, that go into starting a business, And their counselors have a great road map, to business ownership from selecting a business idea, determining its feasibility. Do you want to sell online?
Ross Taets:Do you want to do brick and mortar? Do you want to buy a franchise or be independent? Selecting those business partners that you mentioned, the accountants, the attorneys, finding the location, doing the market research, all these different variables. The counselors there can really help you understand all the aspects of of business ownership that maybe you're not thinking about initially. You know, oftentimes, though, we we see business owners that maybe broke off from their previous employer because they wanted to do something on their own.
Ross Taets:You know, these individuals, generally have a good understanding of how the operations of the business will run because they've had years of experience in the field. They know the employees they need, the vendors that they will use, their target customers, what their competitive advantages will be. So while the SBDC office is a great starting spot for anyone, maybe these individuals don't need that base level, background on business ownership, but helping them find the right partners and mentors and kinda understanding the financial side of things is something that our lenders here at Northwest Bank do a great job of.
Luther Lampert:And as you start planning for the financial needs of your business, what are the most helpful things to have in place before you go and and talk to a banker about securing financing?
Ross Taets:Yeah. I think, having a business plan is probably one of the first things that you'll want to create. This is truly your foundation and and where you put all your thoughts onto paper. You know, I've seen a number of business plans over the years. They're all different and can include different information.
Ross Taets:But I would say some general categories that can be included in these business plans are an executive summary of the business, the background of the business, the owner's resume, what are their qualifications to start this business, Some type of market analysis. What's the industry outlook? The competitive landscape of of the industry that you're looking to enter into? The organizational structure? What type of legal structure are you looking to, start the management of the business?
Ross Taets:How many employees will will join the business, different obviously, the products and services that you're gonna offer and maybe the price points that you're gonna offer those at. And then the marketing approach, how are you going to attract customers? And there's other things that you can add to this, business plan. You know, maybe do a SWOT analysis, the strengths, weaknesses, opportunities, and threats that's often in there as well. But simply taking the ideas out of your head and putting them on paper is probably the best place to start if you're jumping into a new business.
Ross Taets:And the other thing I would say is, and we've alluded to it a little bit is building your team of business partners. I think business owners are generally leaders by nature and want to have, full control of all aspects of the business, which comes natural, and and is very understandable. But I think it's also important for these business owners to relinquish some of that control and find some trusted advisors that they can go to. You know, find an accountant that can assist putting together some projections for you. You know, eventually, they will be your tax advisor and help you understand your cash flow.
Ross Taets:Find an attorney that can help you understand the right legal structure, and create your organizational documents that you will eventually need when approaching a bank to open your business accounts and and things of that nature. Find an insurance agent that can get you in the right coverages to make sure you're protected. And, of course, finding the right banker, finding the right bank, that will understand your business, that finding the right lender that you can resonate with and explain, the business model that you've created, get your account set up so you can start conducting business. So, you know, what I love about Northwest Bank is we pride ourselves in being embedded in the community and, sitting down with local business owners and really understanding where they're coming from and listening to their ideas and being a trusted adviser to them. So, you know, these are groups of people that will set you up for success, help you navigate various challenges that you will encounter as you start your road to business ownership and also be advocates for your business.
Luther Lampert:Ross, if if your current network, of associates doesn't maybe have an attorney or you don't have the name of someone to to help get you started as you're planning your business, Is that something, as a banker that you've been able to help point people in the right direction? Or are there resources to to find, maybe mentorship or names of of services that can help?
Ross Taets:Absolutely. I think every banker, at Northwest Bank is is connected in the community somehow. That's something we take pride on is is creating networks of our own, so we can be referral partners to our customers and and getting them, connected with the right people to help their business succeed and be advocates for their business. So I think if you are searching for that trusted adviser, whether it's an attorney or an accountant or an insurance agent, we deal with these individuals and these professionals on a daily basis in routine encounters that we go through. So if you are looking for a recommendation, a banker is a great place to start, and and they can likely point you in the right direction.
Luther Lampert:You've mentioned taking pride in your role a few different times here. So, Ross, what what drew you to become a business banker? What do you enjoy most about your role?
Ross Taets:So I graduated from Iowa State, and my first job at a college was at a corporate finance in a financial analysis role and really quickly realized that it wasn't my passion. What I enjoyed was being out in the community and meeting people and networking and hearing different businesses' stories. So I quickly made the jump to, the banking world and started at Northwest Bank. And as I've been in commercial lending over the last 7 years, what I found my passion is is really getting started with start up businesses, helping them evaluate all the aspects of their business, getting them the funding that they need to help them see their dream come to fruition, and then walking with them along the way. Business ownership is is never easy.
Ross Taets:It may sound glamorous, but there's always hard times and tribulations that you have to go through. And, frankly, I've enjoyed being there for customers along the way and seeing their success is the best part of my job.
Luther Lampert:And what do you enjoy most working at Northwest Bank?
Ross Taets:The commitment the bank has to small business lending is really second to none at Northwest Bank. You know, our goal is to give lenders the tools to make the process easy and streamlined for our customers that are looking to take the jump into business ownership. What we have at Northwest Bank and a full time SBA expert keeps us up to up to date on SBA changes, which ultimately make the process easier for our customers. So, you know, we want to be the trusted adviser for you when you walk in the doors and support you along the way. And, you know, hopefully, for the next opportunity when your business has grown two times over the next 5 years, we want to be there for you for opportunities down the road as well.
Luther Lampert:If you have a business idea in mind, whether it's, something new that you have yet to start or or maybe a side hustle that is starting to grow larger than you expected, when when might be the right time to begin conversations, with your banker to start growing your business?
Ross Taets:You know, as we say a lot, it it kinda depends. There are many startups or I would say businesses in the first three years of operation that might not have needed bank financing right away. And that's perfectly fine. They might come to a bank after a couple years because maybe they've hit a point in their business where they need some additional funding to grow what they've already established. Others might need funds from the start for equipment or build out or working capital.
Ross Taets:And that's great too. So there is never a wrong time to approach a bank and seek guidance for funding options. I would say, you know, it is important when you approach a bank to have that business plan, ready and established to talk through. As I mentioned, this is really the foundation of your business idea. We'll give insight to your your background as a business owner and why you're qualified to start the business, the competitive landscape in the industry you're looking to enter, and show your roadmap to success that you've laid out.
Ross Taets:I would say one thing to consider, when approaching a bank is they'll likely request some type of financials or projections. How do you envision the business where will perform in the 1st 3 years? So consider the price point or the volume that you think you will sell your product or service at, how much revenue you will need to generate to cover those expenses or some type of breakeven analysis, what what are necessary expenses to get the business up and running, maybe stress tests for situations that might not go quite as planned. So, ideally, that you have some type of data to back up the validity of your projections, and I would say it's always important to make sure these are realistic projections. So I'd say when you do approach a bank, have a strong grasp of all the aspects of your business, understand what your financial needs are, and then articulate to the bank what success will look like both financially and holistically.
Luther Lampert:Ross, thanks for taking some time to talk to me today.
Ross Taets:Absolutely. Thanks for having me on.
Luther Lampert:If you're looking to start or grow your business, Northwest Bank offers tailored financial solutions to support your small business. Our business bankers are here to support you on your path to sustainable business growth. Check out Northwest Bank's biz buzz blog for articles and resources to help you grow your business. Find those articles and more on our website, nw.bank. Thanks for listening.
Luther Lampert:Keep checking n w.bank for more episodes of the podcast. You can also find us on YouTube, Spotify, Google, and Apple Podcasts. Subscribe to get notifications every time we release a new episode. Thanks again to our guest, Ross Tietz, and thank you for joining us today.