I’ve been in touch with numerous small business founders during the past few weeks as they’ve navigated the application process to apply for the SBA’s PPP funding. Some have been successful and received money; others have received only radio silence from their bank.
5 Lessons Learned and Steps to Take Now
Here’s some important lessons learned during this process. I urge startup founders to take the following 5 Financial Steps now for the smart operation of your business.
Separate your personal bank account from your business account. Too many founders still mingle both while they are bootstrapping and getting to MVP or that first customer. Fix this now. You can’t get loans this way or raise outside money down the road, either.
Choose a local, community bank to open your business account. Bank of America, Wells Fargo, SunTrust and the other big banks cater to big companies with even bigger accounts. You will be lost in the shuffle because you are too small to matter. Talk to several community banks before you select one.
Establish a business relationship with a banker at the bank you choose. Talk to them about your business and what your needs are today and down the road. Get to know them. And vice versa.
Tap your network to get an accountant to create basic business financials. It’s amazing how many small businesses simply lack these. There are many sole practitioners doing accounting consulting for companies of your size. Go to one of them.
Increase your financial literacy. If you’re a techie, get some financial basics – plenty of good info is available online from numerous private sector and financial institutions. At the end of the day, you’re building and running a business – not creating technology for the sake of it. The more financially savvy you are – the better business decisions you’ll make.
Liz Sara has provided go-to-market strategies and tactics for technology companies in the DMV since 2001. She also chairs the National Women’s Business Council, a federal advisory body that advocates for female founders to Congress, The White House and the SBA.
If you need assistance with the SBA process, check out NEXT’s Crisis Mitigation Packages.