The North Bay Business Journal, a publication of the New York Times, is a weekly business newspaper which covers the North Bay area of San Francisco – from the Golden Gate bridge north, including the Wine Country of Sonoma and Napa counties.

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Article published – March 9, 2009

BUILDING A BUSINESS: Planning, pre-emptive explanation will help you with your bank

“Plans are nothing; planning is everything.” – Dwight D. Eisenhower

In the last column we discussed a few core principles about building a sustainable banking relationship. “No surprises” and “preparation” are two of the essential elements.

Now we move to planning. This is a broad subject with many variations, so we’ll focus on cash flow forecasting as an invaluable component of that process. While it provides an important tool for your banker, it must also be an indispensable part of your planning arsenal. Gen. Eisenhower’s comment focuses on the process rather than the result to emphasize that unexpected events and new information always make a difference.

Nonetheless, forecasting remains an elusive objective for many business owners. Most of the objections I hear are comments like, “I have no idea what our sales will be” or, “Who knows what will happen tomorrow let alone the rest of this year” or, “Our industry is in such a state of flux that no one knows what might happen.”

While these “Double V” economic times (big volatility and little visibility) make it more difficult than ever to predict and forecast performance, your bank will be remarkably unimpressed by these excuses. (more…)